By: Royal Paine. Help Getting Out of Payday Loan
As reported in the Texas Observer: Roger Tillman, a 64-year-old living in Houston, took out a $500 payday loan from The Money Center in 2008 after the security company he worked for scaled back his overtime shifts.
The Money Center currently offers $500 two-week loans for $150 in interest and fees, or about 650% APR. Like many borrowers, Tillman was unable to pay off the loan and thus renewed it, resulting in deepening debt until October 2009, when he was laid off.
He reports that he requested an extended repayment plan but was not given one. In November 2009, the lender filed a criminal complaint against him, demanding that he pay $1,020 within ten days or potentially face felony charges that carry two to 20 years in jail and fines up to $10,000. “In all, the district attorney demanded $1,250, including ‘district attorney fees’ of $140 and merchant fees of $90”—even though Texas law prohibits payday loan companies from threatening to pursue criminal charges against their customers, except in unusual circumstances.
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