If you believe a payday or short-term loan company has violated your rights or engaged in unfair practices, you have the right to file a formal complaint. Taking this step not only addresses your individual issue but also contributes to regulatory oversight of the industry. The process involves gathering documentation and submitting your complaint to the appropriate state and federal agencies.
Steps to Take Before Filing a Complaint
Before initiating a formal complaint, it is often effective to first contact the lender directly to try to resolve the issue. Clearly outline your concern in writing and keep a record of all communication. If the company is unresponsive or the issue remains unresolved, proceed with the following steps to file a complaint with regulatory bodies.
Where to File Your Complaint
Payday lenders are regulated at both the state and federal levels. You should typically file complaints with both relevant agencies to ensure your issue is reviewed by the proper authorities.
1. File with Your State Regulator
State agencies are the primary regulators for payday lenders. You should file a complaint with the agency in your state that oversees consumer finance, often the Department of Financial Institutions, Attorney General's office, or Banking Department. Visit the North American Securities Administrators Association (NASAA) website or your state's official .gov website to find the correct contact information and complaint form.
2. File with the Consumer Financial Protection Bureau (CFPB)
The Consumer Financial Protection Bureau (CFPB) is the key federal agency that supervises payday lenders and enforces federal consumer financial laws. You can submit a detailed complaint online at the CFPB's website or by phone. The CFPB forwards your complaint to the company and works to get a response, and they use complaint data to inform their regulations and examinations.
3. File with the Federal Trade Commission (FTC)
The Federal Trade Commission (FTC) enforces laws against deceptive and unfair business practices. While it does not resolve individual disputes, it uses complaint data to investigate patterns of illegal activity and take law enforcement action. You can file a complaint with the FTC online.
What Information to Include in Your Complaint
To help the agency investigate effectively, provide a clear and complete account. Your complaint should include:
- Your full contact information (name, address, phone, email).
- The lender's complete name and address.
- Your account or loan number.
- A detailed, factual description of the problem (e.g., unauthorized withdrawals, incorrect fees, harassment, issues with rollovers, or violations of state lending laws).
- Copies of relevant documents such as your loan agreement, payment receipts, bank statements showing debits, and any correspondence with the company.
- A timeline of key events.
- A statement of how you would like the issue resolved.
What Happens After You File
After you submit your complaint, the agency will typically acknowledge receipt and review your submission. They may contact you for additional information. The agency's role varies; some may mediate between you and the company, while others may use the information for enforcement purposes if they see a pattern of violations. The CFPB, for example, generally forwards the complaint to the company, which is expected to respond within a set timeframe.
Additional Resources and Protections
If you are facing harassment from debt collectors, you can also file a complaint with the CFPB or your state attorney general regarding violations of the Fair Debt Collection Practices Act (FDCPA). Remember, filing a complaint is a protected activity, and lenders cannot legally retaliate against you for doing so.
While navigating a dispute with a lender, it is also wise to explore alternatives for future financial needs, such as credit union payday alternative loans (PALs), negotiating payment plans with bill providers, or seeking local emergency assistance programs, which can help avoid the high-cost debt cycle often associated with payday loans.