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Before Bankruptcy

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24

Feb 2013

How to Tell Your Bank to Stop Payday Loan Automatic Withdrawals

Posted by / in Before Bankruptcy / 92 comments

Before bankruptcy, I tell my clients to stop the automatic withdrawals to those internet payday loans.  They always find it’s so hard to get their banks to help.  Today’s  New York Times says the same thing.  The Times says that’s because the banks love those overdraft fees.

Banks will verify your signature on a check to match your signature card. But electronic transfers just sail through.

Probably the most important job of a bank is to make sure nobody takes money out of your account, unless you okay it.    They try to do that on paper checks, by comparing your signature on the check with your signature card.

But when someone posts an ACH transaction on your account, as far as I can tell, nobody looks at anything.  That’s one reason these internet payday loans are so dangerous.

(Legal payday loans in Virginia are not allowed to set up automatic withdrawals.  But most internet payday loan companies know they are illegal and don’t care.)

The Electronic Funds Transfer Act give you important rights to protect your bank account, if you know to use them.  (Regulation E, from the Federal Reserve, also tells your bank that you have those rights.)

You have the right to STOP a pre-authorized electronic transfer up to three days before the transfer is scheduled by notifying your bank.  You can notify them orally or in writing–obviously writing is smarter.  Keep a copy.

(You should notify the payday loan people too.  That’s not likely to stop them; but it improves your legal position against your bank.)

You then have to notify the bank within 60 days if they allow the money to come out anyway.

The bank then has ten days to investigate and one more day to put the money back.  (Even if the bank can’t get the money back from the payday loan, they still have to reimburse you!) If they don’t, you can sue them.  You can sue for the money you lost, which would include overdraft fees.  (A quarter of people who take out payday loans get hit with overdraft fees when the payments come out.) Plus a penalty of $100 to $1000.   Plus the bank has to pay your lawyer.  (Three times the money you lost if the court says the failure was willful.)

I’ve threatened it.  But I’ve never had to sue under the Electronic Funds Transfer Act.   The New York Times article has me eager for an opportunity.

For consumers, I hope this helps your attitude when you tell the bank to stop a payday loan automatic withdrawal.  You are not begging for a favor–even if that’s the way they treat you.  You are asking them to do their main job–keeping your money safe!  And you have rights under Federal Law to sue them if they don’t do it!

 

 

 

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Robert Weed has helped twelve thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

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92 comments
  • Marie Cabrera

    May 1, 2013, am31 9:35 AM
    01

    Can an online Pay Day company illegally withdraw funds from my checking account even when they did not loan me money or denied my loan? I am worried since they have all my banking information. I am in California and the loan company is in Canada. Thank you!

    • Robert Weed

      May 1, 2013, am31 10:03 AM
      02

      Marie:

      Be sure to run down to your bank if you see the online payday loan people taking money out. Obviously you don’t know for sure this online payday loan outfit is really in Canada rather than Sierra Leon.

      You should be worried about giving your banking info to people on the internet that’s not somebody you know is real.

      But you have good rights with your bank if you complain right away if money comes out.

  • Ali

    June 4, 2013, pm30 9:44 PM
    03

    I have a question regarding what I just read on your blog. Can a payday debit consolidation company keep withdrawing funds from your bank account if you change your bank account number and any debit cards associated with that old account? They do NOT have my signature on any checks or contracts. Thank you for your time and reply!

    • Robert Weed

      June 5, 2013, am30 10:21 AM
      04

      Ali:

      Changing the account number should fix the problem. Good luck!

  • Matthieu Guibert

    June 5, 2013, am30 12:40 AM
    05

    If I read the Electronic Funds Transfer Act. correctly, does it mean that if I write to my bank, certified mail, and tell them to stop a pre-authorized ACH payment of $123 they must stop it or reimburse me?. Also my bank claims that if the PDL company see their ACH denied they resubmit a new ACH for a different amount, and the bank cannot do anything. They tell me to close my account…but it seems I can fight the ACH and get my money back if my bank fails me. Thanks for the info.

    • Robert Weed

      June 5, 2013, am30 10:20 AM
      06

      Matthieu:

      I’m with you. The bank can say it’s your problem, but the law puts the responsibility on them. Now closing your account may actually be the only way to stop it. But the bank is supposed to protect your account.

  • Josh Carter

    June 19, 2013, pm30 7:04 PM
    07

    I have two payday loans and they are the devil. I am overdrawn in my current checking account and called to close the account today and told them i would be in tomorrow to pay the negative balance. I was told even though i closed the account that my bank would still pay the ach debits!! How can they do this when i want the account closed? “we pay all transactions that come in” So i set up for both payday loans totally $1,600 dollars to come out and be paid in full. If they pay them in full it means i am out of pay day loan debt but still out the Bank $1,700 buck which i can pay back in a month or two in full! I have no one to borrow money from and my credit is shot! I feel like i am at a dead end! However if they do pay them i won’t have 400.00 every 2 weeks thrown out the window! I can put that and more towards the negative account balance in my checking account. Did i just totally make a mistake? Help..

    • Robert Weed

      June 19, 2013, pm30 7:58 PM
      08

      Josh:

      Two things.

      First, you made a big mistake getting those payday loans–that’s right.

      Second, what I say in this blog is true. If you tell your bank those withdrawals are NOT authorized, and tell the Payday loan people (who will of course ignore what you say) to stop, then it is your bank’s legal responsibility, not yours, if the money goes out. You’ve got to stand tall, be insistent, and NOT let the bank BS you. The law is totally on your side on this. They cannot “pay all transaction that come in” unless that transaction is SIGNED with your signature. That’s what they do; but it’s not what the law says they are supposed to do.

      Be real clear, do what I say in my blog, and if it doesn’t work, get a lawyer.

  • Charles

    July 29, 2013, pm31 6:36 PM
    09

    Once I close my account can they file a felony warrant for my arrest for some type of fraud?

    • Robert Weed

      July 29, 2013, pm31 7:03 PM
      10

      Charles:

      Payday loans act like they have super-hero powers or something. They are just a loan. Not paying a payday loan is like missing a payment on your credit card, or not being able to pay a hospital bill. Not good for your credit, but not fraud or felony or any of what they want you to think it is.

  • Diana Durrance

    July 29, 2013, pm31 7:40 PM
    11

    I contacted my Credit Union by email and by phone telling them to stop any and all ach transfers and they said the only thing they could do is a stop payment and $30.00 per transaction. Is this in accordance in your opionion?

    • Robert Weed

      July 29, 2013, pm31 8:03 PM
      12

      Diana:

      Yeah, I think they are allowed to charge you. But the burden is on them to get it to work. If it slips past them, they can’t just shrug it off. they’ve got to get the money back for you.

  • Jane

    August 2, 2013, pm31 2:44 PM
    13

    I was advised by my banker to close my account after getting numerous scam calls once I took out a few payday loans. Now I’m getting calls from debt collectors posing as ”lawyers” stating that it was fraud to close the account and they are filing charges against me for wire fraud and intent to fraud a bank. Is this possible? I wrote them emails prior to closing stating that I was closing it and we had to make other arrangements. So there was no intent to fraud anyone.

    • Robert Weed

      August 2, 2013, pm31 6:47 PM
      14

      Jane:

      Besides that, those “lawyers” are making illegal threats and you could go after them under the Fair Debt Collection Practices Act. Except for one thing. They probably aren’t in America.

      • Jane

        August 2, 2013, pm31 11:25 PM
        15

        Thank you! I’m going to do just that! Someone needs to teach these sharks a lesson. It shall be me!!!

  • robert

    August 5, 2013, pm31 4:54 PM
    16

    I got garnished a 100% of my pay last month for back state taxes. Now the payday people are on me for not being able to get there pay. I had to pay a lawyer to stop this garnishment. I have overpaid the garnishment amount by $1500 but I cant get that for a month or so…They came and reposessed my truck yesterday and my bank account is already bone dry. Is it wise to goahead and close my bank account so I have at least one foot to stand on come next payday?

    • Robert Weed

      August 5, 2013, pm31 6:37 PM
      17

      robert

      Sounds desparate–yeah you need to do whatever you have to do so this next paycheck lands in your hands.

  • robert

    August 6, 2013, pm31 7:40 PM
    18

    All right thats what I will do then. Anything more I should do before I close it? Besides leave a balance…
    Also, Loanmax did the repossession. How long do I have to get my vehicle back in Kansas?

    The guy who called me, and warned me about this repo I think was actually a person from the repo company…

  • Robert Weed

    August 7, 2013, am31 11:30 AM
    19

    Robert–sorry I can’t answer that question about getting back the car :Loanmax repossessed under Kansas law. No idea at all.

  • Linda

    August 22, 2013, am31 2:59 AM
    20

    I have a payday loan that they are refusing to stop ACH withdrawals from my account, have tried to set up a payment arrangement they refuse; of course. Did a permanent stop payment with my bank however they said they can only stop the exact amount I tell them. For example $90 is the regular payment but if they try to withdrawal $100 the bank says they can’t stop that payment. Is this true should I just close my account? Thanks

    • Robert Weed

      August 22, 2013, am31 11:01 AM
      21

      Linda:

      The bank is telling you the truth when they say they are set up to block only specific amounts. But they are REQUIRED BY LAW to block people you tell them to block. I’m hacked off that the big banks don’t bother to figure out how to do what the law requires them to do. That’s why I posted this blog.

      Sadly, that doesn’t answer your question. I’m walking around here with a chip on my shoulder looking for a chance to sue a bank on behalf of one of my clients. But you aren’t here. So probalby, you just need to do what they say: close that account and open a new one.

  • Andrew

    September 3, 2013, pm30 6:58 PM
    22

    Hey Robert,

    I live in Philadelphia,PA which after some research I have discovered that these loans are also illegal in the state of PA. If I have already paid back more than the original amount of which I initially took out, i can really just contact my bank and have them stop payments to the illegal loan company? I don’t have to worry about them reporting me to a collection agency or putting out a warrant for my arrest for nonpayment? They’re killing me and I can’t seem to crawl my way out of this hole.

    Thanks,
    Andrew

    • Robert Weed

      September 3, 2013, pm30 7:27 PM
      23

      Andrew:

      Right. Stop paying, insist that your bank stop them from taking any more money out; and ignore the illegal threats the payday loans people and their collectors make to try to scare you.

  • nickole

    September 10, 2013, pm30 7:01 PM
    24

    I have taken out two lines of credit. One with cashnetusa and mobile loans and i live in VA. They are killing me with payments of 500.00 a month, and I can’t afford to pay my rent or grocceries for me and my kids. I would like to try your suggestion on closing my account. Do I have a leg to stand on? Will this work for me also in the state of VA?

  • Linda

    October 8, 2013, am31 1:03 AM
    26

    I have a question, I have taken out a web loan of $500.00 and I was told by the company that with the fee’s and interest i would have to pay back 1,280.46. I have payed that and this past Friday I noticed they took out another payment of $150.00 From my account when I got payed so now they have taken a total of 1,350.00.I called and told them i had been over charged they very rudely informed me that the total amount owed to them was 2,800.46? Are you kidding me , For a $500.00 loan? My husband and I both have direct deposit for our payroll, Is there any other way we can stop them from getting more money from us with out closing the account? The loan company Threated to use RRC’s and ACH to get their money,and I was also informed that because its from a Tribal loan company from Missouri and that they do not have to abide by state law and regulations. I live in Florida and I have noticed several complaints from the BBB about the same company…..Please help, Im very frustrated ! This was the first loan I ever did and it will be the last !

    • Robert Weed

      October 9, 2013, pm31 7:40 PM
      27

      Linda:

      Right, these internet loans are dishonest scams. That’s why they are illegal and Virginia and maybe where you are, too.

      And that’s why I posted these instructions on what to tell YOUR BANK in order to stop them from taking more money. The “tribal immunity” may make it impossible to get back the money they have cheated you out of, but it has nothing to do with getting your bank to block them from taking any more.

      You might also enjoy this. Both the State of New York and the Consumer Finance Protection Bureau are going after the banks who handle payments for these Indian tribe payday loans, that may be legal on the reservations but violate state laws. http://dealbook.nytimes.com/2013/10/01/tribes-lose-effort-to-block-new-york-from-regulating-their-online-lending/?_r=0.

  • Jenn

    October 16, 2013, am31 4:23 AM
    28

    I live in Nevada. I have two payday loans, one with moneytree and dollar loan center. I am already on a debt management plan here in Nevada and I asked the counselor if I can add the payday loans to my dmp and she said yes but when I went to drop off the statement, the receptionist told me to close my bank acct. but I don’t want to close my acct. for some reason. But I told her that I will tell my bank to stop the payments. And like you said even if we tell the bank they will still try to take out money from my acct. But my question is can pdl still take out money or do that if I’m on a debt management plan?
    Please advice.

    • Robert Weed

      October 16, 2013, am31 10:28 AM
      29

      Jenn:

      The debt management plan has nothing to do with whether the payday loans can take money out of your account. A debt management plan is VOLUNTARY and so if the payday loans don’t participate voluntarily, they don’t participate. So sure they “can” take the money out.

      I don’t know whether “money tree” or “dollar loan center” are legal in Nevada or not.

      Now I tell my bankruptcy clients to stop the automatic withdrawals because I KNOW that payday loans–the legal ones anyway–have to participate in bankruptcy, because bankruptcy is NOT a VOLUNTARY program. Bankruptcy is a LAW.

      You didn’t get the best advice when you set up the debt management program first, and then wanted to “add the payday loans” later.

      I do know the the bank is required to block the automatic withdrawals if you do what I say, and the bank is required by law to get the money back if they let the payday loans take it out, after you tell them not to.

      I don’t know why you “don’t want to close your account” which is the easiest way to do it. And more importantly, I don’t know what the payday loans can or will do to you if they are legal in Nevada.

      The key point is this. A debt management program is voluntary. Most credit card companies voluntarily participate in debt management programs because they don’t want you to file bankruptcy. But I don’t know what payday loans will do.

      I am a bankruptcy lawyer. I have nothing against debt management plans–the honest ones anyway. And I recommend one or two people a month to try them. But I like bankruptcy for most people. Because I KNOW it will work.

  • Tammy

    October 22, 2013, pm31 12:02 PM
    30

    Good Morning Robert, Like many above I too took out online payday loans. Now I am overwhelmed by the cost. I live in Indiana and paying about $900-1000 per pay check to loan companies. I am contemplating closing my account to resolve this or at least keep my check. Can loan companies sue me, have me arrested or will I be committing fraud? Additionally, will fees still be accurred for ACH debits after closing account? Is online payday loans legal in my state? PLEASE HELP!

    • Robert Weed

      October 22, 2013, pm31 4:50 PM
      31

      Tammy:

      Sorry I don’t know anything about payday loans in Indiana. I know that you are not committing fraud and they cannot have you arrested. I do NOT know if the loans themselves are illegal there. Here is one hint. If they are telling you that they will “have you arrested” then they know they are illegal and don’t care. A legitimate outfit would not say that, because they could lose their license for making an illegal threat.

      You might go to avvo.com and post a question there for Indiana lawyers to answer.

  • Iris

    October 31, 2013, pm31 1:38 PM
    32

    I have closed my bank account to stop ACH payments on two internet loans,Plaingreen and mobil loans. Is this legal? My bank will not close my account until after 30 days. I live in VA

    • Robert Weed

      October 31, 2013, pm31 1:44 PM
      33

      Iris:

      Those loans are illegal in Virginia–so it is legal for you to stop paying. (Don’t know why your bank says it takes 30 days to block them. That’s not right, I don’t think. You will get outrageous threats form debt collectors after you block those payments–those threats are illegal too but they don’t care. But they won’t do anything.

      • Iris

        November 7, 2013, pm30 6:57 PM
        34

        Thanks for this valuable information. I’ve passed it along to othwers who live in Virginia a

  • B.Williams

    November 4, 2013, pm30 6:12 PM
    35

    Hello,
    I took out an online payday loan in the state of Texas in April 2010 and I ran in to further financial issues before paying back to Cashnet.com. I had to close the checking account to prevent overdrawning the account and all the additional fees that I couldn’t afford at that time. I have now 3 years later started recieving phone call from a collection agency named Department of Fraud Investigators at 888-620-0128 stating that they are going to have me arrest and continue calling me at my job leaving harassing messages etc. I ask them to stop calling me at they are not Cashnet.com and that I would follow up with Cashnet.com and work them directly if possible.
    Can this company that is not the online lender have me arrested and/or serve me a warrant?
    What is the statue of limitation for the state of Texas for an online pay day loan?
    What should I do if Cashnet has not contacted me directly regarding this matter?
    What should I do to prevent the harrassment and threatening nature of this company?

    Please let me know as your help would greatly be appreicated.

    Thanks,

    • Robert Weed

      November 4, 2013, pm30 7:25 PM
      36

      B:

      Illegal payday loans send their debts to illegal debt collectors. I do NOT know the first thing about Texas payday loan law. (I am a lawyer in VIRGINIA>) But I can tell you that it is ILLEGAL for a debt collector to threaten to arrest you. And like I say in this blog, it is probably impossible to find this “Department of Fraud Investigators” in order to sue them. I gave you the link to the Federal cybercrimes reporting unit–you should file a complaint there.

  • Ashley

    November 5, 2013, pm30 5:58 PM
    37

    I have a question.. i’m from Canada so the best of knowledge would be helpful…i had a insta loan for 200.00 they wrongfully with drew too much money out of my acct. mths later they called i told them to apply it to my amount owing.. never have i seen it applied to my statement.. i put a permant stop mths ago finally got a call from them last mth and a statement showing i own now 400.00 as 200.00 is nsf fees.. i think they are totally in wrong.. i told them i would never give my acct info to them plus i would do the right thing and once i see a statement with the nsf fees gone i would go into the office and pay.. where do i stand?

    • Robert Weed

      November 5, 2013, pm30 7:22 PM
      38

      Ashley:

      I barely know American law outside of Virginia. I can’t shed any light on Canadian law. sorry.

  • eric rainey

    November 9, 2013, am30 1:37 AM
    39

    Hi, my name is Eric.I was wondering about a situation that a loan company got my fiance into. Her mom took a loan out using my fiance’s car as collateral.The car is in my fiance’s name.My fiance gave her mom permission for the first loan to do so.then her mom paid off the loan using another loan from another company and my fiance also signed for the okay on collateral.But here’s what I don’t understand. Her mom had the loan altered or either paid off and started a new loan.The company 1st franklin financial did not get my fiance’s permission for this third one.(not sure what to call it we went to the loan place to ask them why her car was in hock.they told us all they could show us was the paperwork from last loan were my fiance had signed and the new loan papers were they wanted her to sign but I told her not to sign anything because she did not give them consent to put a lien on her car this last time.Is it a crime to do this? They had no permission from owner of vehicle to use it as collateral.Who do i contact about this?Do I need to call the police and report them?Or is a lawyer only way to make them straighten up?They also lost the keys to the car.Are they liable for the value of the keys?Very confused at this point. We are located in south Mississippi.

    • Robert Weed

      November 9, 2013, pm30 12:17 PM
      40

      Eric:

      That’s a really important question, but I don’t know. It would depend a lot on what the papers that she did sign said–maybe they gave permission to keep rolling over the loan. But it would also depend on Mississippi law–maybe title lenders are not allowed to keep rolling over the loan.

      You can take a look at NACA–the National Association of Consumer Advocates, for a lawyer in Mississippi who does automobile law–they might be able to help. http://naca.net/find-attorney.

      (I would think they are almost for sure liable for the value of the keys–assuming they really did lose them. If they are just using that as an excuse, they might be liable for a lot more. But I know nothing about Mississipi laws.)

      • eric rainey

        November 10, 2013, am30 6:29 AM
        41

        Thank You for your input Robert.It is much appreciated!

  • Stefanie

    November 15, 2013, pm30 3:37 PM
    42

    I live in the state of Georgia, where I recently learned Payday loans are illegal. I have two loans that I took out. One of them was for $1000 of which I’ve paid back over $1200 (and the balance shows I still owe $961) the other was for $700 of which I’ve paid back a little over $500 (not sure what the balance shows on that one). I bank with Chase and have not told them to not honor the ACH (didn’t know I could do that) and I guess I just want to double check with you, is telling my bank to stop honoring those payments something I really can do? If it’s illegal in my state how were they able to do it at all? I’ve seen quite a few loan companies that flat out say they don’t loan in Georgia (and any other state where it’s illegal). How are these companies doing it?

    • Robert Weed

      November 15, 2013, pm30 3:50 PM
      43

      Stephanie:

      How do they do it? Because most people never figure out they are illegal. And heck even these guys have broken even on you.

      Can you really tell your bank to stop honoring those ACH…how much clearer could I be?

  • Marie

    November 19, 2013, pm30 4:34 PM
    44

    Like the people who’ve posted before me, I too took out a couple of payday loans and my question is this. If I tell the bank to stop allowing the automatic withdrawals, how do I stop the payday loan companies from harassing me at work? Calling and harassing me and my coworkers could very easily get me fired. Do you have any advise on that front? Thank you for your time.

    • Robert Weed

      November 19, 2013, pm30 4:44 PM
      45

      Marie:

      That’s the problem when you give your contact info to organized crime. I think you should report them to the FBI for cybercrime even if you then give in to their harassment and pay them.

  • Alisha

    November 21, 2013, pm30 8:29 PM
    46

    Hi Robert,
    when placing a stop payment on a payday loan company for the first time (they have never taken money from my account before) do I go into the bank the day before and place the stop payment, or do I need to go in the day of the payment? I use a credit union.

    • Robert Weed

      November 21, 2013, pm30 10:05 PM
      47

      Alisha:

      I think you want to give them as much notice as you can, if you really want them to stop it.

  • Tammy

    November 27, 2013, pm30 10:18 PM
    48

    Hi, I have been receiving unknown calls for the past couple of days from an agent hayes about a court summons and to call a 1 877 number to discuss arrangements and she called today saying she is from investigations about a breach of contract and to call a different 1 877 number, she never states what the call is about and the 1 877 numbers don’t say who they are, it just says call to avoid summons and legal proceedings, never mentioning whom the contract is for. I did take an online loan from Cash Net but paid it off with another company saying the same things. I haven’t returned the calls and she has been saying for days now she coming to my house or job with legal documents and I have been notified, Is there anything I could do about this, I have never been in trouble before and this has me shook.

    • Robert Weed

      November 28, 2013, am30 11:47 AM
      49

      Tammy:

      Yes, you can complain to the FBI. And also the Consumer Finance Protection Bureau. The links are in my other blog. (The one you commented on before.) And tell your friends NEVER get internet payday loans–they are dealing with organized crime.

      Here’s the FBI again. http://www.ic3.gov/default.aspx. Here’s the Consumer Finance Protection Bureau again. http://www.consumerfinance.gov/complaint/

  • chris

    November 29, 2013, am30 4:58 AM
    50

    Robert

    I got a call from a Michelle Jackson from ”Acs” collection saying she Filed check fraud charges against me for a company called bottom dollar payday. I did have a loan with them and fell on hard times. I tried to negotiate repayment terms and they scoffed at me. I changed my bank account number to stop charges being taken out. The company is based over seas and not even licenced to do business in any state. Well with the collection agency they claim to be based out of Buffalo new york, and do sound very American on the phone. When I called I asked Michelle if she was planning on coming to California to serve me paper s, she said if I would make a payment arrangement she would Email the process servers not to serve me. Can I be arrested for Check fraud for an online payday loan because I changed my account number before the loan payment went through or are they trying to scare me?

    • Robert Weed

      November 29, 2013, am30 11:17 AM
      51

      Chris:

      I think they are only trying to scare you. I don’t know anything about California law, I’m a Virginia bankruptcy lawyer, but I’d tell my Virginia clients to NOT be scared; and to report this Michelle to the Consumer Finance Protection Bureau.

  • lori

    December 3, 2013, pm31 3:44 PM
    52

    I live in VA. I have four PDL that I have to keep taking out to pay eachother. Now our bills (mortgage is late because of it). I have no idea what to do. I have called the bank and read your article. I asked them to stop taking the payments out. They said that I could withdrawl all the money from the account, and they would be returned as NSF (would cost me $36 each time) or I could put a stop payment on them (for $34 each) but if they change the amount that is owed then I’m still stuck. All four of them are illegal lenders in Virginia. I have paid THOUSANDS of dollars in intrest in the past few months trying to keep my head above water and now I can’t do it anymore. My kids won’t have a Christmas and my bills will not get paid. My credit will now reflect a 30 late mortgage payment. I have no idea what to do. Even closing the account and starting a new one won’t help because I work for the government and my check is direct deposited into that account. Any advice would be great!

    TIA

    • Robert Weed

      December 3, 2013, pm31 3:51 PM
      53

      Lori:

      I’ve told you what I know. You need to be tougher with the bank–tell them you read somewhere that if they let a payment through after they’ve been told not to, they have to go and get the money back or get sued for three times the check. See if that works.

      • lori

        December 3, 2013, pm31 5:57 PM
        54

        I am getting ready to call them now. Am I understanding correctly that if I close my account and start a new one then I can set up payment plans with the illegal PDL lenders to pay off the balance? Is that what I should do?

  • Robert Weed

    December 3, 2013, pm31 8:46 PM
    55

    Lori: Since those loans are illegal, why would you pay them off?

  • Chris

    December 17, 2013, pm31 11:08 PM
    56

    I have a suntrust checking account that I want to close but each time I get it to zero, it gets hit with an ACH. I’ve told them 4 times on the phone that I want the account closed and went into the branch twice to settle up with cash. They say that even if I close it, if an ACH hits within 30 days they will honor it sending me negative with NSF fees. It seems to me that even if I haven’t specified the organization that I did not want paid (per Regulation E), that telling them to shut it down followed by 3 days of no activity should have done the trick, right?

    • Robert Weed

      December 17, 2013, pm31 11:54 PM
      57

      Chris:

      I don’t know any more than what I put in my blog. But I can certainly tell you what the blog says. Tell them they need to block whoever it is from putting through any more unauthorized ACH debits. Your rights are NOT a right to “close the account.” Your right is a right to prevent unauthorized withdrawals. And if money comes out after that, they need to get it back for you.

      I’d suggest you also complain to the Consumer Financial Protection Bureau. Whether or not it’s a violation for them to allow money to come out after you told them to close the account, it should be. So ask for a new regulation–and send SunTrust a copy.

  • Keisha g

    December 20, 2013, pm31 5:28 PM
    58

    I have told my bank several times to block a PDL in writing, but the PDL people will pop up every few months taking money out of my account for different amounts and they go through. My bank claims they can only stop certain amounts that I tell them. How can they do this because I don’t know when these PDL people will pop up again and try to debit my account. I have sent my bank 2 forms saying “stop ALL future transactions from PDL”. Doesn’t this require them in TX to stop all debits regardless of the amount? BTW it’s the form they sent me.

    • Robert Weed

      December 20, 2013, pm31 8:52 PM
      59

      Keisha:

      You need to go back to them and say, this was not authorized, you need to get it back. And you can add, I’m told I can sue you for triple damages if you don’t.

  • Wren

    January 11, 2014, am31 7:10 AM
    60

    Robert, I live in Ohio and I have 6 payday loans (2 of which are tribal) and I am constantly juggling to make ends meet on ssdi. My checking account is in Wva. I have another one in MD which I use from time to time but never gave out to anyone online. This financial disaster is from a house remodeling effort that went several directions at once- truly unforseen events. Should I close the checking account in WVa and inform the bank why I am doing it? Or just close it and notify the PDL people of the need to negotiate the matter and use money orders? And would I be violating any interstate banking/financing, IC3 laws doing so? As you can see from the time I am writing this that it is worrisome to me. You are very insightful and very much appreciated. I realize you are in Va.

    • Robert Weed

      January 11, 2014, am31 11:07 AM
      61

      Wren:

      You are certainly NOT violating any laws by closing some of those bank accounts. Yes, I think you should inform the BANK because sometimes they try to charge you even after you’ve closed the account putting through unauthorized charges. The bank is responsible to you.

      As to what you should do about these payday loans–you need to talk to a lawyer in Ohio. If you are living on SSDI you may have more than a months income out on payday loans. You need to figure out if you can stop paying ALL of them. “Negotiate the matter?” Maybe just tell them to go jump in the lake. You need an Ohio lawyer to look at each of them.

  • Whitney Webb

    February 6, 2014, am28 10:45 AM
    62

    Hi there! I am a resident of NC (where apparently payday loans are not legal) I hope that perhaps you can shed some light on my situation.

    Freshly out of college and had only been working a few months, I got on the Internet to see what type of loan I could qualify for so that I could purchase a car and get moved into a place of my own. To my surprise $300 was deposited into my bank account. I was not meaning to actually apply for any loan but decided I’d just pay it off and it’d help to build my just beginning credit. Come payday $90 was taken out. I assumed this was going towards my balance. After many $90 payments I contacted them thinking this loan should be close to being paid off. When I spoke with them I was told my balance was still $390 and the $90 was arrefinance charge. This really aggravated me but I took responsibility and set up payments of $102 to betaken out every 2 weeks towards the balance owed. After many $102 payments I received a phone call that the company switched hands and lost my bank information and that I had one final payment of $102 left. I immediately returned the call and provided to information as I was ready for this to be completely over with. This was in October, and I had been dealing with this since February. Well on December 27th I receive an email from the new company that I did not recognize stating that I need to call and set up payments to my loan. To my knowledge my loan was payed off. I contacted them and they state I owe $390. I insist I paid it off. They asked for proof. I went to my bank statement and cannot find the charge for the final payment in October. I saw it pending the day I made it and most definitely had the funds in the bank. I do have the proof for all other payments made on my previous bank statements. I am not sure what to do at this point.

    • Robert Weed

      February 6, 2014, am28 11:12 AM
      63

      Whitney:

      What you should do at this point is do NOT deal with scammers! How long will it take before you figure out these people are just conning you!

      Actually you should complain to the Consumer Finance Protection Bureau and the FBI. If enough people complain, somebody may try to find those guys and prosecute them. You can find the links at the bottom of this blog. http://robertweed.com/bankruptcy-five-year-warranty/

      • Whitney Webb

        February 6, 2014, am28 11:46 AM
        64

        Thank you for the advice. Unfortunately, I feel as though I have to deal with them in order to protect my credit score. I am most definitely going to report them. I will not be dealing the pay day lenders ever again and to say I’ve learned my lesson is an understatement.

  • Francisco

    February 11, 2014, am28 6:29 AM
    65

    I just recently got a “line of credit” with cashnetusa and today found that they are illegal in virginia. What should I do? Should I go ahead and close my bank account? Should I switch banks? Please help.

    • Robert Weed

      February 11, 2014, am28 11:27 AM
      66

      Francisco:

      Good question. But I don’t know any more than what I say on my blog.

  • Mimi Lewis

    February 14, 2014, pm28 8:22 PM
    67

    Had a PDL back in July – made payments and refis. Come Sept., I was unable to pay. The lender hit my account a few times causing me to have NSF fees. I paid the NSF Fees and the PDL didn’t attempt to take out any more money. I haven’t heard from them since. I figured they would turn me over to a bill collector. That being said, I received my income tax return on Tuesday in my bank account. This morning, I saw that they took out $1785! I called the bank and told them I didn’t authorize this particular transaction. They had me come into the branch to fill out paperwork. I asked the lady if she could see where they have had to hit my accounty between mid September and now. She said no, that they hadn’t attempted to hit my account prior to today. I didn’t know that I could inform the PDL people not to hit my account or that I could tell my bank not to let them hit my account until I read your blog. But, my question is how long can they attempt to take money from your account? I live in TX by the way and PDLs are legal here but there were recent reforms that went into affect last summer.

    • Robert Weed

      February 14, 2014, pm28 9:07 PM
      68

      Mimi:

      They can’t legally take money out of your account without your authorization. What did you authorize? Your state law may give you more rights, but I don’t know anything about Texas.

      • Mimi Lewis

        February 14, 2014, pm28 11:16 PM
        69

        The last payment that I authorized was back at the end of August for $250.00. I have not authorized any other payments after that.

        • Robert Weed

          February 15, 2014, am28 11:35 AM
          70

          Mimi:

          Then how hard is that. Those people have STOLEN money out of your bank account. That’s wire fraud. It’s a felony.

          After you insist your bank gets the money back, report the scammers to the CFBP and the FBI. You can find the links here. http://robertweed.com/2012/12/18/internet-payday-loans-are-illegal-in-virginia/

          • Mimi Lewis

            February 15, 2014, pm28 2:55 PM
            71

            Thank you so very much for this information, Mr. Weed. I greatly appreciate it!

  • Mike

    February 14, 2014, pm28 11:57 PM
    72

    I know you are an attorney in VA, and I am in Oregon, so you don’t know specific Oregon law, but here is my dilemma:
    I took out a loan with Cash Jar (overseas) in July for $800, they took out between $150-$200 every 2 weeks until December. They then sold my account to OnSpot Capital (tribal lender), who began the same thing all over again. My balance is still over $600.

    After reading some similar advice, I went to my bank and they stopped payments from being taken by OnSpot, I disputed the validity of their authorization to make any withdrawls, and my bank refunded me all 3 payments that they had taken since mid December. Now OnSpot is calling constantly and I am preparing for what to say to them…
    1- Online Lenders have to be licensed with the State in Oregon- neither Cash Jar nor OnSpot are.
    2- I did not sign anything with OnSpot. In fact, I did not actually SIGN anything at all.
    3- I have more than repaid what I borrowed. I am done paying these guys.
    Do I tell them to kick sand, or am I better off making arrangements to repay to save my credit?

    • Robert Weed

      February 15, 2014, am28 11:33 AM
      73

      Mike:

      Why do you think paying these scammers will save your credit? You are obviously a smart guy.

      Get your credit reports from each of the three at annualcreditreport.com–free. (Do NOT go to freecreditreport.com, which is NOT free.)

      See if those illegal payday loans are there. I’d be real surprised. The credit bureaus don’t want the illegal payday loans on their credit reports, because then they (the credit bureaus) are caught in the cross fire about whether those loans are a legal debt.

      (The illegal payday loans are hard to stop because thyme know they are illegal and they are good at hiding. The credit bureaus are NOT hiding. If they get tangled up in this you now how somebody to sue.)

      Tell them to kick sand. Then report them to the CFPB and the FBI. Find the links here. http://robertweed.com/2012/12/18/internet-payday-loans-are-illegal-in-virginia/

  • Cyndi Karl

    February 27, 2014, pm28 8:48 PM
    74

    Hello. I recently applied for a payday loan online and have been getting calls non stop all day. I got a call from a gentleman with a strong Indian accent saying that I had been approved for a $5,000 loan and if I decided to cancel my application they would deduct $499 from my bank account. They have my bank account and all my information. Can they actually do that without my authorization?

    • Robert Weed

      February 28, 2014, am28 12:05 AM
      75

      Cyndi:

      Can they–maybe; legally, no. That’s why I wrote this blog. Talk to your bank about this problem.

    • Summer

      April 9, 2014, am30 1:39 AM
      76

      I made the same dreadful mistake as well. I was starting a new job and needed moving expenses. I applied online, thinking that I was applying for one loan and my info got sold to everyone! I get constant calls and I’ve asked them not to call me any more. I called one company back and asked to cancel my application. They proceeded to inform me that I would need to pay $700 to cancel the loan application.

      I contacted my bank and they offered the fee-based stop payment, but I didn’t have an exact amount. I never actually accepted a loan, receive funds (which they could see), or authorized the ACH to repay the loan. They said that I could place the account on “deposits only” and this status prevent any withdraws from my account. I transferred my balance to my savings account and I will eventually close my checking account. My bank was very helpful. I also placed a credit freeze with the bureaus.

      On a side note, I told the scammers that I was a law school graduate (careful not to saw lawyer) and I would love to try my hand filing a civil suit and exploring criminal charges. He then referred to me as Ms. Prostitute! I guess I was supposed to be offended into paying money.

      They really try to pressure you into paying. It’s crazy and I’m silly for opening myself up to that.

      • Robert Weed

        April 9, 2014, am30 9:59 AM
        77

        Summer:

        Thanks for sharing that story. Hope it helps warn others.

        If you haven’t, you should file a criminal complaint with the Internet Criminal Complaint Center, here. http://www.ic3.gov/default.aspx

  • Rick

    February 28, 2014, pm28 12:22 PM
    78

    This was a fantastic read! However, can you tell me if we have similar laws and rights over here in Australia? I have had direct debits from a loan repayment continue to come out after I had completed the repayments and had even received a hard copy of my completed loan statement in the mail. And yesterday a charity direct debit that I canceled over a year ago, started trying to debit my account twice this week?? What’s up with this?

    • Robert Weed

      March 1, 2014, pm31 9:45 PM
      79

      Rick:

      I know NOTHING about Australia

  • Gina

    April 3, 2014, pm30 5:13 PM
    80

    I took out two internet loans. One through Western Sky and the other through Silver Cloud Financial. I defaulted on the loan to Western Sky, closed the bank account associated with that loan. I’ve also submitted a complaint through CFPB. My understanding is that the CPFB is suing Western Sky and it’s other entities (WS Funding, Delbert Services, Cash Call) regarding these loans. Closing the bank account associated with that left me overdrawn approximately $1200. I’ve been told they are not considered a “PayDay” loan but an installment loan. I’m waiting to see the outcome of the CFPB suite, which I’m sure may go on for months. I can no longer afford to pay the other loan through Silver Cloud Financial. My questions is …how do I know if this is considered a “PayDay” loan vs. an installment loan? I understand from earlier post that these internet “PayDay” loans are illegal in VA but if they are considered installment loans are they still illegal? Also, because I am now overdrawn on the account I closed I don’t seem to be able to open another bank account. If I go to my current bank and tell them that I need my account closed because I am disputing the ACH withdrawl as illegal will they have to open another account for me?

    PS I forgot to mention. I am in Virginia

    • Robert Weed

      April 3, 2014, pm30 8:34 PM
      81

      Gina:

      I’ve told you on my blog pretty much all I know. Don’t know when your account went overdrawn, so don’t know if you can still dispute the payday loan ach.

      I send a couple people every week to TD Bank. TD will often open up a bank account for people whose credit is so messed up they can’t get an account anywhere else. Also, people tell me good things about them–my wife uses that as her bank.

      Glad to know you complained to the CFPB. I’d appreciate it if you post something here if you hear back from them.

  • Melanie Owens

    May 19, 2014, pm31 3:11 PM
    82

    I have taken a payday loan out with Cashnetusa. I have fell on hard times and called them to ask them to delay my payment for two weeks and was told they could not honor it and that I needed to fax proof of employment payments etc. When I took the loan I was unemployed and they knew that and still an unemployed. So told them I had no proof of deposits from income but that they needed to change date payment is due since no money will be in account. They were very rude and did not wan to work with me. When I researched about this I found that payday loans and such are illegal in Md. IS this correct. I called my bank M and T and asked them and they were not aware of any such law but said I can stop the ACH from coming out of my account from this company. So going forward if Cashnetusa puts in to have a withdrawal it will decline it. It cost me $35.00 to do this but better then over drafting my account every time. My question is going forward. IF they are illegal to practice in md why are banks putting through the ach withdrawals and what about paying back the money. Will this go on my credit report since legally they are not allowed in my state?

    • Robert Weed

      Robert Weed

      May 19, 2014, pm31 3:37 PM
      83

      Melanie:

      Good work. You definitely need to check your credit report–and if they do show up, you need to do a dispute. And if that doesn’t work, there are good credit report lawyers in Maryland who would LOVE to talk to you about it. You can find some of them here. http://www.naca.net/find-attorney.

      Attorney General Eric Holder is trying to crack down on banks taking payments for illegal payday loans. I posted on Google+ on that a couple months ago–I’ll see if I can forward it to you.

      Here it is, I think https://plus.google.com/118406949356702622582/posts/cvEcQi4G4yA

  • Rachel Stigler

    May 30, 2014, pm31 12:54 PM
    84

    I called my bank to make a stop payment on 4 payday loans. I did this all within the allotted time. I checked my account today and the payday loan payments are pending in my account. What should I do? Will these go away or are they really pulling the money even though I paid the $30 stop fee? Please help!

    • Robert Weed

      Robert Weed

      May 30, 2014, pm31 2:51 PM
      85

      Rachel:

      Get right after the bank and INSIST. They act like it’s not their problem, but the whole job of a bank is to pay the people you want them to pay and NOBODY ELSE.

  • nelson robinson

    June 12, 2014, am30 1:24 AM
    86

    I live in, Nc and I’ve been dealing with an online payday loan for a while now to the point where,I can’t afford to keep letting them draft funds from my account anymore, So I go in to one of my local branches to put a stop payment on this ACH draft the female employee here at the bank states we don’t put stop payments on accounts dealing with payday loans she then states well at this branch anyway. Can a bank do this decide what you can and can’t put a stop payment on for your account (money)?

    • Robert Weed

      Robert Weed

      June 12, 2014, pm30 3:08 PM
      87

      Nelson:

      That is exactly what they usually tell you. That’s why I posted this blog. The job of the bank is to pay people you want to pay and NOT give money to anybody else (well, unless there’s a legal garnishment.) You need to insist. If you were in VA and they didn’t stop it, I’d be glad to sue them for you, but since you’re in NC I can’t.

      • nelson robinson

        June 12, 2014, pm30 9:43 PM
        88

        Thank you for your response, Mr.Reed.

  • Trish

    June 27, 2014, pm30 10:18 PM
    89

    I have been receiving several phone calls saying the authorities of my city will be looking for me and I have a case for fraud, Ive never done anything fraudulent. They say its pay day loans. That took place 2010. Is what they are saying possible?

  • Janice

    July 24, 2014, am31 3:17 AM
    91

    Mr. Weed I have two internet payday loans and my bank is closing my account. Thank goodness. I live in NC and I know once they can’t get their money, the calls will start. Also, I went into Virginia, right across the NC line and took out a payday loan. I’m wanting to make arrangements with them to pay their money back. Can they deny me pay back options at the one in Va?? Should I worry about the online ones??

    • Robert Weed

      Robert Weed

      July 24, 2014, pm31 3:23 PM
      92

      Janice:

      Since you live in NC, I don’t know anything about NC law. Sorry.

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