Internet Payday Loans are Illegal in Virginia

Internet payday loans are illegal in Virginia.  They are a felony.  (In order to make payday loans in Virginia, they have to have a licensed office in Virginia.  The internet payday loans do not have offices Virginia–they are on the internet.)

Since the people behind the internet payday loans could be sent to jail in Virginia, the internet payday loan companies are careful to stay beyond the limits of Virginia law.  Some claim to be operated by Indian tribes, which cannot be regulated by state governments.   Others are in foreign countries.

When you get an internet payday loan, you are dealing with organized crime. People like "Tony Soprano." The good news is, they are digital organized crime.

Their internet payday loan websites seem friendly enough, but to understand who you are dealing with, think of the Godfather, or Tony Soprano.  When you sign up for an internet payday loan you need to understand you are dealing with organized crime.

Digital organized crime.  Because they are “digital” they will not really come around to your house and shoot your dog, the way Tony Soprano might.  They will, however, make illegal threats.

Most of those threats will be on the phone, but sometimes they come by email.  Here’s an extreme example.   It’s a threat that the consumer will be arrested for bad checks and bank fraud.  That threat is total bogus.  The people who are guilty of bank fraud are the internet payday loan companies themselves.

Even after bankruptcy, my clients sometimes still get these illegal threats–and they ask if I can get the bankruptcy judge to stop them.

Sorry, the answer is no.  Think about it this way.  They didn’t care they could get one to five years in jail just for making the loan…do you think the internet payday loan people care the bankruptcy judge will fine them?

So, what can you do?  Here’s my best advice.  just say, “My bankruptcy lawyer told me you’d try that BS on me.” And hang up.  You may have to do it five or six times.  But when they know you have wised up, they will move on to someone else.

Is there any good news?  Sometimes, we get lucky.  Sometimes the illegal internet payday loan ends up in the hands of a legal debt collector.  Here’s one example.   Kathy, not her real name, got an internet payday loan through Pay Day Loan Yes.  Pay Day Loan Yes, on their website, does NOT have any information about where they are located.  (They claim that they do not make the payday loans themselves–they just arrange them.  That dodge is also illegal in Virginia.)

While Pay Day Loan Yes is operating illegally in Virginia, their debt collector, NCA appears to be a legitimate outfit.  A legitimate debt collector, collecting an illegal internet payday loan can get sued under the Fair Debt Collection Practices Act.  We plan to do that for Kathy.

What’s the big lesson in all this?  Don’t give you social security number, bank account info, and phone numbers to Tony Soprano.