Amerihope Alliance Legal Services and attorney Greg Nordt warn consumers:
Do not pay fees to debt relief companies that promise that they can negotiate a pay off and stop the payday loan companies from calling you. They can't. They charge a consumer for an attorney to send their payday loan company a cease and desist letter and a letter of negotiation. Neither of these letters with help you in any way more than you can help yourself. These type of scam companies are preying on payday loan consumer's fears.
The FTC said consumers paid between $300 and $2,000 to debt relief companies who make promises to stop harassing calls from their payday loan holders and to settle their payday loan debt. A cease and desist letter will not stop payday loan companies from pursuing the debt owed to them. It is best to work out a payment plan with the creditor.
You can download a free cease and desist letter on our Free Cease & Desist Letter page.
Exercise your right to request documentation or proof of any debt. That way you're less likely to fall for a phony debt collector.
Attorney, Gregory M. Nordt, Esq. warns consumers to read about the FDCPA (Fair Debt Collection Practices Act) and learn your rights as a consumer. Do not answer questions from debt collectors, even if you have defaulted on a loan.
You should ALWAYS demand the following:
- Debt validation letter showing original creditor
- Amount of loan
- Amount owed
- Date of loan
- Date of last payment
The debt validation letter should also state whether the company contacting you now owns the debt and if they are licensed to collect debt in your state. Also, if a debt collector has any of your identifying information like date of birth and SSN - please have your bank put fraud alerts on all your accounts, as well as contacting the three credit agencies (TransUnion, Equifax and Experian) and have them put fraud alerts on your credit files too. Report the call to the FTC, the FBI and your state's Attorney General. Inform the debt collector that the FBI is monitoring and recording all calls made to you.
If you are suspicious of a payday lender or a person that is calling to help you with payday loans, or you feel you have been the victim of a loan scam please contact the Federal Trade Commission at 1-877-FTC-HELP (382-4357), or online at www.ftc.gov.
If you feel you have been the victim of any scam involving the Internet please contact the Internet Crime Complaint Center online at www.ic3.gov.