Payday lenders are regularly looking at the courts looking for charges that are criminal borrowers don’t possess the funds to repay their loans on time, a written report from Texas Appleseed discovered. Such fees can lead to arrest if not prison time in the event that courts choose to pursue an incident.
“as well as their outrageous prices and financing practices, pay day loan businesses are illegally using the criminal justice system to coerce repayment from borrowers,” said Ann Baddour, director associated with the Fair Financial Services Project at Texas Appleseed.
While just a small fraction of these borrowers really find yourself jail that is serving, Appleseed stated that threats of unlawful fees are a good way to force debtors to repay the loans, that may carry effective APRs in excess of 500%. In Collin County, Texas, for instance, 204 individuals paid a collective $131,836 after unlawful complaints were filed, the report discovered.
Appleseed analyzed significantly more than 1,500 complaints that are criminal by a lot more than a dozen payday lenders between 2012 and mid-2014. Yet it says they are ” simply the end of this iceberg” since it only examined public record information from eight associated with the state’s 254 counties. (more…)