Are payday loan companies in New York legal? I have several I cannot pay and they are just too much. What do I do? I’m a NY state resident. I took out several payday loans online in February. I’ve paid hundreds of dollars over the principal balance. I’m not sure how I will pay the loans off. Can you give me any advice on what I should do? Askbill shows more Show less The majority of consumers fall for these small loans, also called « cash advance loans », « check advance loans », or « deferred deposits check loans ». The average of $300 loans come with a $15-$30 fee for every $100 borrowed. The borrower must provide the lender a post-dated check which the lender will use to transfer electronically either a payment or the complete amount of the loan from the borrowers account. As a customer service is provided, a partial payment may be taken out of the account. This can be extremely risky. The partial amount becomes an ongoing installment that will continue despite the borrowers’ best efforts to stop it. With interest rates this high and terms that are so condensed, it’s no wonder that loans are typically repeatedly rolled over by the borrower. Thus the annualized interest rate for the borrower can range from 390% and 780% APR, depending on the number of times the principal is being rolled. A fun fact about payday loans is that Wikipedia.org is the most popular online encyclopedia, list payday loans under Loan Shark, stating that « if the most important characteristics of loan sharking are high interest rates and a credit product that entices debtors, then the label certainly applies. » Quick Tip Payday loans are illegal in New York, and a debt collector is not allowed to take or attempt to collect on a payday loan from a New York resident. In February of 2013, New York’s Governor directed the New York State Dept. Financial Services to notify debt collectors that New York law prohibits the collection of payday loans. File a complaint with the Department. of Financial Services if you are New York resident and a collector attempts to collect payday loans. The Federal Trade Commission has a amazing website about payday loans. Payday loans and consumer rights A payday lender could attempt to collect the debt. If the borrower defaults, the payday lender may sell the balance to a collection agent that we will discuss in the future. If the payday lender (or collection agency, in this case) cannot convince you to pay through standard collection tactics like phone calls and letters or letters, the payday lender could decide to file lawsuits against you in order to secure a judgment for the remainder of the amount owed. If the lender sues and obtains a judgment against you, the lender could then proceed to enforce the judgment as permitted by the law of your state in civil court. Payroll garnishments and bank account levies are two of the most common ways to enforce a judgment. Not included on the list are calls to your employer, contacting neighbors, and obtaining a warrant for arrest. Failure to pay a debt is not a crime however it is a civil matter. Payday lenders often use the threat of arrest for check fraud. This threat is not valid if the payday lender is not able to prove that the borrower had a plan to pay back the loan. It’s very difficult to establish otherwise. Also, remember that nobody has been held or imprisoned in the United States for debt since the time of the Civil War. The borrower is required to pay any outstanding balance in the event that the payday loan company sells the account to an agency for collection. Editor’s note Comments on this website are now closed. Payday Loans will explain how you can get payday loans. For more information about payday loan laws in the states of California, Florida and Illinois, Massachusetts, Missouri (New York), Texas, Virginia, and Massachusetts, please visit Bills.com. Federal law, the Fair Debt Collections Practices Act or FDCPA (Fair Debt Collections Practices Act) provides that third-party collection companies should stop calling you once they are informed in writing. California, New York, Texas and Texas extend many of these laws in the FDCPA to include the original creditors. For advice on how to handle an agent of collection who is that is constantly harassing you, refer to the following advice if you’re being harassed by a Collection Agent. If the payday lender sells the account to collection agencies, the debtor has the option of stopping calls by sending a cease request letter, also known as a cease & desist notice to the collection agency. You can locate samples of cease and desist notices at the Bills.com Self-Help Center for Debtors. How do I manage the payday loan collection process? Many payday loan collectors use intimidation to create fear among borrowers. However, even if people are in debt doesn’t mean that they’re losing their rights as a consumer. The payday lenders typically require their borrowers to give their checking account numbers in order to make withdrawals from their accounts through Automated Clearing House. The payday lender will attempt to take money even if there isn’t enough funds in the borrower’s accounts. Overdraft charges could be paid by the borrower. If this occurs frequently enough, the bank might end the borrower’s account. The borrower can close one account at one bank and then open another to stop payday lenders who are constantly withdrawing funds. This only works in the event that the bank is able to link the transactions of both accounts into the new one. When the payday loan in new york (http://a8audi.ru/1-21-kapot.html) lender withdraws funds the bank will open the account and take the funds out. This lesson is to be sure that the bank does not permit electronic withdrawals from the old account to automatically transfer to the new one. To know more about your rights as a New York resident, read the Bills.com article New York Collection Laws. New York: Payday Loan New York has several laws which prohibit payday loans. New York General Obligations Law (SS 5-501) provides the 16% APR for civil usury limit. New York Penal Law SS 190.40 & 190.40 is a 25% APR criminal usury cap. Check cashers are forbidden by New York law from cashing checks that have deferred dates. What is the procedure for payday lenders in New York operate legally if payday lending is illegal? New York payday lender partners with banks from deregulated states. They provide loans through electronic funds transfer, and claim that the local storefront broker loans for the bank that is exporting its home state’s interest rates and other terms in New York. This is called renta-bank lending. The New York City Dept. The New York City Department. Read the New York State Guide to Avoiding Dangerous, or ‘Predatoryloan. Additional Information on Payday Loans Learn more about strategies and tactics for dealing with creditors in Bills.com’s article on Debt Negotiation & Settlement Advice. Bills.com offers additional details on their Payday Loan Information page. They also respond to questions from readers about payday loans in California and Florida, Illinois, Massachusetts and Missouri. Payday loan companies may pursue legal action against you if your loan isn’t repaid. Learn more about creditors and debtors by visiting the Bills.com resource Collections Advice. Take a look at the Bills.com Budget Guide and Financial planning guide. They can assist you with your finances as well as teach you how to budget and be prudent in managing your money.