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Illegal Online/Payday Loans

Stuck with a high-interest on-line loan?  You’re not alone.  Recent years have seen an explosion in on-line lending.  Hundreds of on-line lenders offer nearly instantaneous approval of small loans.  Everything is done on-line, with funds electronically deposited into a borrower’s account within minutes of submitting an application. The problem is that many of these loan are predatory and violate Alabama law.  Lenders prey on folks in a bind for quick cash, and then they charge huge interest rates (sometimes more than 600%) and fees that dwarf the original loan amount.  The COVID-19 pandemic only made matters worse. 

Many of these loans violate Alabama law.  In Alabama, no lender may charge more than 36% for a small loan (defined as a loan less than $1,500).  Also, Alabama law requires that any small loan lender be licensed in Alabama.  If the loan is made to an Alabama resident who was in Alabama when the application was submitted, then it is subject to Alabama law.  Yet, many of these loans blatantly violate Alabama law.  We’ve filed suit over loans with interest rates exceeding 600%!  Plus, many on-line lenders are not licensed in Alabama.  In most cases, a small loan that violates Alabama law or is issued by an unlicensed lender is void.  If you’re loan is void, the lender has no rights to collect anything from you and you are entitled to a refund of all money paid to the lender. 

Many on-line lenders claim to be affiliated with Native American tribes and, therefore, immune from state laws.  However, many courts throughout the country have found these “rent-a-tribe” lending schemes to be unlawful.   We are involved in several cases seeking to put an end to this practice. 

If you’ve been victimized by this predatory practice, or just have questions about your on-line Alabama loan, call us for a free consultation.  We’ll evaluate the situation with your loan and help you determine whether it is enforceable under Alabama law.  And we’ll give guidance as to the best approach to the situation.  



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