Payday loan From another country

I very unwisely received a "Payday" loan from a company that it turns out is based in Costa Rica.

Over the life of this "loan" I have paid back my principle and indeed have over paid the principle by amount three time that.

The original loan was for 300.00 and I have paid back at this point 600.00 due to their fees.

I have recently found out that Payday loans are illegal per say in PA, or at the least highly regulated as to the interest rate charged and that the company must be licensed in PA to do business with PA customers under PA law.

I e-mailed the company and told them that since they are illegal in PA and that I have already paid them back in excess of the amount of principle, that I was refusing to pay them any more (I still owe 100 plus their fees).

They wrote back that the contract is considered to take place in Costa Rica and is valid and enforceable as such. Is this true and what should I expect them to do if I refuse to continue paying them?

Dean

gullstaff:

I have recently found out that Payday loans are illegal per say in PA, or at the least highly regulated as to the interest rate charged and that the company must be licensed in PA to do business with PA customers under PA law.

Can you cite the exact law that you are referring to?

gullstaff:

Over the life of this "loan" I have paid back my principle and indeed have over paid the principle by amount three time that.

That's what generally happens with these loans.

gullstaff:

I e-mailed the company and told them that since they are illegal in PA and that I have already paid them back in excess of the amount of principle, that I was refusing to pay them any more (I still owe 100 plus their fees).

Ok - did you send them the information you have on pay day loans?

Did you contact the PA Atty General to see why this business is allowed to operate illegally?

gullstaff:

Is this true and what should I expect them to do if I refuse to continue paying them?

They could take you to court for the money you owe, they could trash your credit, They could hound you for their money, They could call your family and friends looking for you so you opay them the money you owe them, They could call your place of employment looking for you so you can pay them the money you woe them.

What will they do?

Who knows.

You need to make sure that your understanding of the law is correct and not what you think to be correct.

"House Bill 2672 of the 2002 session established the first payday loan laws in Pennsylvania. In the bill it states that any payday loan business operating in Pennsylvania must include the information on the following topics in their loan agreement form:

• Appropriate use
• Maximum loan amounts
• Finance charges
• Limitations on Renewal of Loans
• Right to Rescission
• Limitations on multiple loans

As for restrictions on fees, Pennsylvania has laws that are similar to Oklahoma. Under Pennsylvania law a payday loan lender cannot charge more than 20% for the first $300, and 7.5% for any amount in excess of $300. However, instead of a $400 limit, lenders in the state of Pennsylvania are allowed to provide loans up to $500. Also, the total amount of fees cannot exceed $75.

As stated above, a consumer has the right to void their loan agreement and cancel their loan to avoid paying fees. They can only void a contract if they do so at the close of business or 5 p.m. the following day of the transaction.

Under Pennsylvania law, a lender cannot lend second payday loan if a borrower has an outstanding balance. Before a person can borrow a payday loan in Pennsylvania, they must verify to the lender they have no outstanding loan balances. If a person renewals a payday loan agreement, the lender has the right to charge additional fees. The fees must not exceed 30% of the first $300 or 7.5% of any excess amount up to $500.

All payday loan lenders in Pennsylvania must post a notice of charges. The notice must contain the following statement in ten-point type: This is a deferred deposit loan instrument.

Pennsylvania law prohibits a cash advance lender from seeking criminal charges on anyone that defaults on a loan because of insufficient funds. " Per http://www.paydayloanl...

Also see the following

http://www.payday-loan...

I understand my folly in taking the loan out in the first place. My question is the legality of them trying to enforce a foreign contract when my state law as staates that they are illegal on multiple levels (interest rate, not licenced in PA).

How could they attempt to collect on an illegal loan if it is?

"How could they attempt to collect on an illegal loan if it is?"

You will have to check with the Attorney General to find out if it is illegal for them to collect on it.  In the meantime I would close the bank account they had access to and start paying everything by cash.  The last thing you want is for them to raid your bank account.

Laymans take:

If the  lender does not meet the requirements to do business in PA , is in violation of some PA laws, is not licensed in PA  , whatever, all suggest the lender has no workable means of enforcing the loan via a court action in PA given that you raise any number of defenses to such practices.

However that leaves open at least one area where I have few clues--if  you agreed in the fine print to be governed by laws of Costra Rica and the laws of Costa Rica permit easy default judgements to be obtained, then if a judgement was obtained in Costra Rica and domesticated into PA ( Acts of sovereign governments tend to be honored) you might have problems to shake a judgement!

I'm sure there is a reason that such payday firms located offshore--most likley to circumvent regulatory requirements of various states. And they had teams of lawyers to help find friendly jurisdictions and craft friendly to lender rules

You and I are probably in way over our heads as to if PA will honor a debt collection from another country  by a collector who operates inconsistent with PA law. but who secures a judgement consistent with lenders local law.

Might be a good question to pose to Consumer Protection Office within PA's Attorney General's Office.

.

I agree. I am in way over my head and the last section of your post is the burning question for me.

I have an inquiry into the PA Attorney Generals office as you suggest but I have not heard a peep from them as of yet. 

I am still interested in opinions from others as well as to what they think regarding such a small claim (100.00) being pressed against me in a PA court from another nations court systems judgement.

I will post any news I get from the AG if and/or when I get it.