Illegal Finance Charge on Payday Loan

I live in memphis, TN, I took a $400.00 loan from and they added a $202.50 finance charge, I either have to pay them the whole $652.50 they want on 10/21 or can pay just the $202.50 finance charge for a two week extension, after which they will again want $652.50, I can\'t afford to make either deal with at the moment.

I consulted TN Dept of Financial Institutions to see whether my payday loan was or was not within the states legal guidlines as suggested. The man i spoke with said he would have to review it further but said that they company didn\'t appear to be licensed for business in TN, that I likely only needed to pay the principal borrowed, and that several things on my loan application were not in holding with state regulation.

The finance charges ($202.50) placed on the loan exceed the 15% ($70.59) they are allowed to charge me.

TN also has recently changed the laws to include a no choice of law rule, blocking\'s claim that all loans fall under the governing laws of Castries, St Lucia.

The man said whatever I planned to do I should take steps to secure my bank account against withdraws if I dispute this loan...

Im not sure what to do now?

Thanks for helping me early, and thank you again.

3 Answers

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You are required to pay them only the principal amount, as they are not licensed to operate in your state. If you have paid them more than the principal, then ask them for the refund. Illegal lenders won’t be able to take any legal action against you. If you have any complaints against the lender, then contact with the Tennessee Department of Financial Institutions. Their contact detail is as follows:
# Address - 511 Union Street, Suite 400 Nashville TN 37219
# Phone - (615) 741-2236
# Fax - (615) 532-1018

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You can either close your account or ask your bank to put a hard debit check on your account. This way the company will not be able to make unauthorized withdrawals from the account. You are only required to pay back the principal amount i.e., $400. You are in no obligation to pay the interests or fees.

Click on the link to know how to deal with the illegal pdl lenders:

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Close you bank account ASAP and revoke any voluntary wage assignment.

How to Deal with Illegal Loans..OhioGal's Primer
PDL's are ILLEGAL in the following states...
OH AND NH have very restrictive low cost interest rate laws.

SOL for all states

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