Responsibility rests with whom?
Two threads in DebtCC forums compelled me to write this article.
Confusions: Are lenders allowed to do business with citizens of the state where they are not licensed?
It seems they are not. Otherwise the Attorney General of the state of West Virginia would not have instructed payday loan companies to refund the overly charged fees? Read the full story.
Confusions: If a North Carolina consumer applies, through internet, for payday loan from a company that is licensed in Delaware, which state law the both of them should follow? Also, if the borrower defaults in such cases, what legal action lenders can take? Is there any law that supports the lender or the borrower?
Unless there is a strict law applied for Internet-based Payday Loan Companies, Stanley suggests some solutions:
For consumer: Read the very fine print very very very carefully. By agreeing to the contract you actually agree to follow the state laws where the company is licensed which create lots of confusions later on. If the lender is not licensed in your state, it’s better to stay away off them.
For lenders: Online business does not mean you would break local laws. There are several technical ways to locate the state/region of visitors. You should restrict your online business to the states where you have proper license only. Visitors from the states, where you are not licensed, should not have the privilege to apply for a loan. Tracking users’ IP is not that tough nowadays!
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January 12th, 2007 at 1:07 am
There is a case in Kansas that will hopefully soon answer these issues. Keep your fingers crossed for justice.
January 12th, 2007 at 1:49 am
I am really looking forward for a better law and I am hopeful too. Do let me know whenver there is any updates Polly
And enjoy a lot with Jess and Fins…