Q: Can criminal charges be filed when you default a payday loan? can a company threaten you with arrest and a felony?
A:
Payday loans are illegal in NC. Can a company threaten you with arrest? Sure. Will they follow up? No. Its the equivalent of a drug dealer calling the cops to report a robbery of his drugs or money. Would a drug dealer do that? No because the drug dealer would implicate himself in a crime. Same with the payday lender.
Any payday lender who is making this kind of threat is probably located overseas - another reason that makes prosecution unlikely. A victim has to testify in criminal cases. An overseas lender is not going to come to the US. However, being overseas means that the payday lender does not abide by US or state law. The Fair Debt Collection Practices Act and NC's law prohibits this kind of conduct. Criminals who break the law don't care and payday lenders doing business in NC are no different than criminals. If they are breaking the law by lending money do you think they are going to care about the law prohibiting threats to debtors?
Here's a brief article I wrote on payday lending in NC (and the other states where I am admitted): http://www.rachelhunterlaw.com/articles/article_9_Pay_DAY_Lending.html
I would contact the NC attorney general but if you are dealing with an overseas lender, there is not much that even the NC attorney general can do.
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