With the challenging state of our economy in the United States, it makes sense that many people fall into financial challenges from time to time. For some, it seems like the only way to cover costs between paychecks is a payday loan.
However, these payday loans should be avoided unless there is no other choice. In addition to unethical lending practices, these payday loan companies commit a range of fair debt collections violations.
What Is a Payday Loan?
A payday loan is a small cash loan. Borrows take out these loans generally to cover their costs before their next paycheck comes in. They are attractive loans for people to get to their next paychecks, as not much is needed to obtain these loans.
What is the Problem with PayDay Loans?
There are two primary problems with these loans.
First, the interest rates attached to these loans is unconscionable. Borrowers who miss a single payment are faced with impossibly high compounding interest rates. Before long, most borrowers go from small cashflow problems to financial dire straits. Payday loans do more damage than good in the majority of cases.
Second, once borrowers fall behind on their payments, payday loan companies are infamous for engaging in a range of collections law violations, including:
- Excessive collection calls, including calls after legal hours
- Collection calls at work
- Harassing family members
- Text messaging harassment
If you can avoid taking out a payday loan, you should. These are extremely dangerous loans that can ruin you financially. If you do find yourself in debt for a payday loan and are falling victim to creditor harassment, you need help fighting for your rights.
At the Law Offices of Todd M. Friedman, we represent clients in a range of consumer rights issues, including creditor harassment from payday loan vendors and other lenders. An experienced team of attorneys is the most potent weapon for protecting your rights against creditor harassment.