a consumer is trying to get a payday loan

Payday Lenders

Check cashers that loan you money – for a fee.

Payday Lenders

People use payday lenders when they need more money than they have in their checking account.

Payday lenders loan you money until you get your next paycheck. They charge you a fee for this service.

How does it work?

  • They have you sign a contract that explains the terms.
  • You write a check to them and they give you cash.
  • They hold your check and cash it on the day you agreed to in your contract. They must cash your check within 31 days.

Payday lenders must put notices and contracts in the same language used in your discussions.

How much can they charge?

The check you give a payday lender cannot be for more than $300.

They cannot charge you more than 15% of the check you write them.

For example, if you write a $300 check, a payday lender cannot charge you more than $45. For a $300 check, you will only get $255 in cash.

Can I receive more than one payday advance?

No. You can only have one at a time at a given location.

What happens if I can’t repay the money?

If you don’t have enough money in your account to cover your check, the payday lender has the right to ask for the amount of your bad check, plus a $15 fee.

The payday lender can sue you for these amounts plus court costs. Court costs can total $100 or more.

Triple Damages

Normally, when someone gives you a bad check, you can sue for three times the amount of the check.

Payday lenders cannot sue for triple damages.  The law forbids it.

If you are sued for triple damages, give the judge the following:

  • California Civil Code Section 1789.35(f) and 1719.
  • California Financial Code Section 23035c (6)

Ask us for copies of these laws.

These laws prohibit payday lenders from suing for triple damages.

If you are being sued, you can ask us to meditate with the payday lender instead of going to court.  For help, call our Mediation Services.

Threats of criminal prosecution

Payday lenders cannot threaten you with criminal prosecution.

Civil Codes 1789.30-39

County of Los Angeles Department of Consumer and Business Affairs. Last change: May 5, 2008

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