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Have you requested a Pay Day Loan Lately?

Have you requested a Pay Day Loan Lately?

Maryland State Regulators have stated that pay day loans that charge exorbitant interest rates at say 300% are illegal in Maryland. Yet these outfits still continue to operate under the guise of the internet. Their mailing addresses are almost always unrecoverable. When you are lucky to corner a representative from one of these companies on the phone, they become very evasive and will typically refuse to divulge the physical whereabouts of their operation. Regardless, many Maryland residents have used these services with nothing but nightmare results. Pay Day Loans are typically small dollar types of loans, usually around $1,000.00. The catch is that if the money is not paid back in short order or many times even if it is, the person being given the loan is hit with exorbitant interest rate charges that are considered "usurious" in the State of Maryland. Usurious typically means that a charge is excessive and, therefore, the agreement underlying the loan is not enforceable. When certain pay day loan companies are not paid back per the agreement with the borrower, these outfits will typically hire a collection firm to collect on the debt. As reported in the Daily Record on November 22, 2010, the collection firm of Smith, Haynes & Watson operating from Mission, Kansas, was hired by East Side lenders, LLC, operating from Newark Deleware, to collect on defaulted upon Pay Day Loans. After receiving mountains of complaint regarding the is collecti0on firm's collection practices, Maryland's Office of Financial Regulation suspended the firms's collection license in the State of Maryland after serving a cease and desist order upon East Side lenders, LLC, this past June. Some of these complaints alleged that consumers that had been granted these loans online were receiving collection calls from Smith, Hayes & Watson to repay loans that had an annual interest rate of 782 percent!!

After being warned several times to cease collecting upon these Pay Day Loans, the State was forced to finally suspend Smith, Hayes & Watson's collection license. It stands to reason then, that if this collection firm is no longer able to collect Pay Day Loan debt, then neither can anyone else. As a matter of fact, Maryland seems to be a safe haven where a person in trouble could apply for this type of loan, have the money transferred to their account, never pay it back, and technically these lenders would never be able to collect on the underlying obligation because of the excessive interest rates being charged!! Of course my advice is to simply not apply for these types of loans as I have seen it drive many a person into bankruptcy. The person, trying to do the right thing by attempting to pay back the loan at the expense of mortgage and/or car payments.

If anything, the signal that should be gleaned by these lenders is to simply stop operating in this State and refrain from lending to any Maryland residents period. The State of Maryland has unequivocally stated that it will not tolerate these types of loans, nor allow collection.