5 Cases Where You Can Seek a Payday Loan Refund
Applications about loan refunds make a significant percentage of complaints filed by the consumers in the US. There are a number of cases where an individual can legally ask for payday loan refunds. The refunds can be for part of the payday loan amount or the associated finance charges.
But what are the cases whereby the individual can seek a refund or compensation from the payday loan lender? Here we will look at some of the cases where the lender can request for clemency or an outright refund of the loan.
1. Financial Difficulties
If you are facing financial difficulties, you are entitled to ask the lender for a loan modification. You have the right to request the lenders to lower the rates or forego penalties. The lender is supposed to work with the borrower to make loan repayment arrangements. Moreover, the lender is also not allowed to exploit the situation when a borrower is struggling to repay the loan by issuing additional loans. If you feel you have been forced by the lender to avail more loans to repay old ones, you can seek for refund or compensation.
2. Unethical Collection Tactics
Another situation where you can claim a refund of the payday loan amount is when the lender harasses the borrower to repay the loan amount. Most state laws prevent the lender from making a call after 8 pm. Moreover, they are not allowed to make threatening calls when collecting the loans. If you are subject to harassment by the loan collecting agency, you can sue them to get compensation for the undue stress because of the unethical collection tactics.
3. Payday Loan Scams
The lenders are required to perform identity verification before issuing a payday loan. The identity check is required to prevent criminals from illegally availing loans in the name of another. If you have been a victim of such a scam, you should inform the lender right away and request a refund.
4. Multiple Request for Loan
Whenever lenders make a request for repayment of the loan, a bank fee is incurred that must be paid by the borrower. The lender must let you know when they would make a request with the bank for debiting the loan amount from your account. However, some lenders do not inform the consumers about this and worse make multiple requests with the bank due to which you have to pay a large amount as bank fees. In such a scenario, you can request to seek compensation for the financial loss.
5. Illegal Payday Loans
The payday loans are governed by state and district laws relating to the loans. The legal provisions specify certain limits such as rate caps, allowed payday loan rollover, maximum loan amount, and fees caps, etc. If you are issued a payday loan that does not conform to legal requirements regarding the loans, you can seek refund or compensation.
You can request for refund or compensation directly from the payday loan lender. However, if the lender does not comply with your requests, you can also file a case with the relevant state agency that addresses concerns relating to payday loans.