How to Deal With Collection Agencies for Internet Payday Loans

An Internet payday loan is a loan against your future earnings that comes with a very high fee. According to Bills.com, the charge can run from $15 to $30 per $100 borrowed as of December 2009. You get the loan by applying over the Internet. Online payday loan providers may turn your account over to a collection agency if you do not repay it as agreed. You may even get collection calls for a loan you did not take out because collection agencies sometimes target the wrong person. In either case, you are protected by a federal law, the Fair Debt Collection Practices Act, that helps you deal with these agencies.

Instructions

1

Record every phone conversation with the collection agency when it calls about your Internet payday loan. Some states let you do this without telling the other party, while others require you to disclose what you are doing. You may wish to alert the collector, even if your state does not require it, because he may be more likely to treat your respectfully and follow the law when your have a verbatim record of the conversation.

2

Ask for the name and address of the collection agency and request written validation of the Internet payday loan debt. You are entitled to this under the FDCPA, and the agency is in violation of the law if it refuses to provide this information. The agency cannot collect on a payday loan for which it does not have proper validation.

3

Send a certified letter to the collection agency demanding that it cease and desist all communication with you regarding the debt. You can do this whether the debt is valid or whether you are the wrong person. If it is not your debt, let the collection agency know this. It must abide by your request once it receives the letter or face penalties for violating the FDCPA. This does not mean it cannot take further action like suing you for the payday loan if it is allowed to do so in your state, but it will stop the harassing phone calls. It must let you know if it intends to sue even if you have sent a letter.

4

Contact the original Internet payday loan provider and make payment arrangements directly with that company. Bills.com says several states have laws requiring these companies to accept payment installments. You can still send payments even if you live in a state without this requirement, or you can put the money aside until you can pay the company in one lump sum.