Debt and Lending Rights for Consumers

You have the right to completely understand the costs of anything you purchase - this also goes for payday loans. In fact, by law (The Truth in Lending Act) you must be informed in writing as to:

  • The APR (Annual Percentage Rate) for your loan
  • The actual dollar amount (rather than just percentages) of the applicable finance charges

Additionally, Congress passed a law called the Fair Debt Collection Practices Act (FDCPA) in response to irresponsible and often abusive conduct by collection agencies which seemed to be causing increased number of bankruptcies.

This law is targeted to those who regularly collect debts whether it be a collection agency or a lawyer. Debt collector's behavior is restricted by law, even if the debt is legitimate.

You can read about the FDCPA here Some of the conduct restrictions included in the FDCPA are:

  • Only you or your co-signer may be contacted about the debt; third parties such as a relative or neighbor may not be contacted.
  • Falsely threatening you with repossession or garnishment or to damage your credit rating or refer your account to an attorney. While these are possible actions a debt collection agency can take, they can't falsely threaten you with that action.
  • Calling you before 8 a.m. or after 9 p.m. unless you have specified to the debt collector that they are allowed to call you outside of those times.
  • Using insults, obscenities or other unacceptable language.
  • Threatening you with arrest.
  • Sending you mail which appears like an official court notice.
  • Making any false claims such as claiming to be a lawyer, using a false name or claiming to have started a lawsuit.
  • Suing you in a court of law that is far away from your place of residents.