A payday lender sent you to collections. Know your rights.
If you cannot repay a payday loan, the lender may attempt aggressive collection. Federal law (FDCPA) limits what collectors can do. Some tactics used by payday lenders — like threatening arrest or unauthorized bank debits — are illegal.
What collectors cannot legally do
Cannot threaten arrest
You cannot be arrested for failure to pay a debt. If a collector threatens jail or legal action for a civil debt, this violates the FDCPA.
Cannot call at unreasonable hours
Collectors cannot call before 8 AM or after 9 PM local time. They cannot call your workplace if you tell them to stop.
Cannot debit without authorization
Once you revoke ACH authorization in writing, neither the lender nor a collector can debit your bank account. Contact your bank to place a stop-payment.
Cannot harass or deceive
Repeated calls, threats, obscene language, and misrepresenting the amount owed are all FDCPA violations. Document everything.
If you are in payday loan collections
Request written validation
Within 30 days of first contact, send a written request for debt validation. The collector must prove the debt is valid and the amount is correct before continuing.
Revoke ACH access
Contact your bank in writing to revoke any ACH authorization. This prevents the lender from making further withdrawals.
Document violations
Keep records of all calls, texts, and letters. Note dates, times, and what was said. FDCPA violations can result in $1,000+ in damages per violation.
File complaints
Report violations to the CFPB, FTC, and your state attorney general. These agencies track patterns and take enforcement action.
Balance On Hand is a cash-flow planning tool. It is not a lender, loan servicer, or financial advisor. This page is for general educational purposes only and does not constitute legal, tax, or financial advice.