Online Payday Loan Companies Are Loan Sharks That Trap People In Debt And Then Disappear

Not enough, maybe, but at least Congress has started to do something about the deceptive credit card industry.  Now it is time for it to tackle an ever growing menace known as the payday loan industry and especially the online payday loan industry.

If you are interested, Huffpo has a post on the subject, we review here, and the site is looking for your horror stories as well.  You can email those payday horror stories to Huffpo at this email address -

submissions+debt@huffingtonpost.com

What Huffpo reported was that the online payday lending industry group, Online Lenders Alliance, wrapped up a 3-day conference near the White House, where they pandered to senators and congressmen from both parties.  Or, maybe, the pandering was the other way around.

Regardless, the purpose of the OLA is to weed out the bad apples of the industry by requiring its members, none of which are listed on its website, to comply with good business practices.  But, you know, good business practices do not always represent moral or even consumer friendly practices.  You can be a loan shark and still account for your profits appropriately.  Also, not many payday lenders promote themselves as being part of the OLA.

What is obvious, however, is that online payday loans are becoming more of the norm. Online payday loan lenders loaned (?) approximately $7.1 billion in volume for 2008 according to one estimate.

Consumer advocates sent a letter to members of Congress urging them to ignore the conference and implement a cap on interest rates.  There point was that online payday loans are layering a whole other set of risks on top of a product that is set to fail by its basic structure.

As quoted in the article, Dale Pittman, a consumer protection lawyer who represents victims of debt collection harassment and abuse in Petersburg, Va., has some experience tracking online lenders. He said, "It's hard as hell to find these people ... You can't communicate with them and tell them what they're doing is illegal." Thirty-five states have enacted interest caps that effectively ban payday lending, but Virginia isn't one of them and so online payday loan lenders are avoiding these caps.  Pittman tried to track down several online lenders on behalf of a client who was drowning in debt after taking out multiple payday loans over the course of a year. None of the lenders had a license, as far as Pittman could tell, so all the loans were illegal.  He also could not find but one of the lenders.

The same problem is occurring in a bankruptcy setting.  Whether or not it is an automatic stay or discharge injunction violation to submit an actual check for payment on an account which was issued before the filing of the bankruptcy, most of these lenders no longer accept actual negotiable instruments.  Not only do these payday sharks ding  bank accounts all of the time, but if they recover money that money will likely have to be returned if any turnover adversary is filed.  But, try to find the company.  The bank statements are not much help.  Usually the trail is so difficult to uncover and the potential recovery is small enough that most bankruptcy attorneys do not believe it is worth their time, especially if they cannot recover attorneys fees if no stay violation is found.  The debtor in bankruptcy, however, is made to suffer.

Comments

[Patches]

They are super bad. Boss has directed me to draw up at least 3-4 Motions for Turnover against these jerks. We are definitely are not going to take them Violating the Stay. Almost everyone I talk to who has a payday loan and is filing bk has a similar story about them threatening to send the "Sheriff" out there to their work, or that they will "cash the post-dated check" and then refer them to the local DA. For some reason they are collecting out of the Dallas area. Who the heck has time to pursue Fair Debt Collection stuff in BK? I see a lot of that stuff let go in BK, I guess because we are getting such a benefit. It doesn't make up for the wrong though. If I heard it like once in 5-10 interviews I would think it would be too much but it's like every other one!

[Katie]

Can a payday loan, if payed back on time with no penalties actually increase your credit score? It seems that if you have bad credit your only option is a payday loan given that most banks wont lend to you. If that's the case and you need emergency cash it might be beneficial to use a payday loan if it turn helps your overall credit score.

[Charlotte]

I am in the process of paying off several pdl's through settlements with two VALID Collection Companies, which where not ruthless and worked with me. However, I do have one more pdl out there that I defaulted on, I have tried to locate the on line pay day loan's address to send them something in writting stating that I will pay and what type of payment plan but no luck. They have now SOLD the loan to a collection company called The Bar Group. They say they are officers of the court and they use scare tactics that are illegal like going to jail, getting you fired etc. Any how the collection Company, the Bar Group wanted to settle with me but wanted my checking information over the phone, I would not give them my info. I asked for there address and also asked for them to send me in writting validation and then we could work out a payment plan and I would either wire the payments each month or send a cashiers check, they refused this as well. Does anyone know or heard of this Collection Company The Bar Group? And possibly have there address. I have googled them and find nothing, I even checked the BBB they are not listed under this name. HELP!

Charlotte

[Meredith]

here you go, Charllote:
The Bar Group
(collections for 500Fast Cash, etc)
2925 E Riggs Road
Suite 8-230
Chandler, AZ 85294
tel: 888-731-4045
fax: 888-731-4235

You might also want to check out this website:
Fair Debt Collection Practices Act
Full text of the law governing third party collection of debts.
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf

Best of luck!

[MzJay]

Funny because I started getting calls from a "server" who actually left me v-mail's stating that there will be a court summon against me if I do not contact their client. Their client is the BAR GROUP and I too have trouble finding any type of info on them. I even spoke w/their supervisor and he too refused a mailing address or a license registration#. He demanded for my banking info. To safeguard myself I requested something in writing, but he would only email it to me. I haven't even gotten a email either. Still I wouldn't pay unless something was sent to me in writing. When I tried to fax a letter stating that the FDCPA laws allow me as a consumer to get a copy of the debt in ? -- Debt Validation Letter the fax# was wrong. Well it belongs to Bayside Asset Management. Can someone plz tell me what needs to be done? I do not dispute the debt. I AM ready to pay it off! However these Bar Group employees will not work w/me in verifying that they are a LEGIT company who really does have the rights to my defaulted pay day loan. HELP!!?!?!?!

[Jay Speer]

I wouldn't pay these people anything. Find a lawyer who does fair debt collection practices act cases and make them pay you: www.myfairdebt.com

[payday loan]

No one forces people to seek in these payday lending rates. If Person rates, these people do not know (they To disclose their hidden or not), that there are laws on the books Allowed for the prosecution. Whether we realize it or not, unless we
Coercion, we make every decision, we have concluded that We are rich decision, we will be we do not have. payday loan

[payday loan]

I guess not much. In reality, payday loans are not as bad as the great bank we just gave one trillion U.S. dollars. They get a bad rap. If you go digital, attitude is a low field of about 30 meters the truth. Oxford University and a research scholar at Vanderbilt University found that the lender modest profits and high costs, but also profitable industry, far less than banks and credit card industry. So we can not say that they are threats. In fact, they who help those in need of quick money.