To stop using aggressive techniques for debt collection
Sylvester, GA -- (SBWIRE) -- 03/07/2016 -- Two of payday lenders from Oklahoma Indian tribes have settled with the FTC in keeping with the ethical guidelines for debt collection.
Miami and Modoc are the Oklahoma based tribes that have agreed to settle with the FTC. According to the agreement that has been reached, they will stop pursuing aggressive strategies like harassment, threats of arrests and lawsuits, in order to collect debts. Another important aspect of the agreement is that the lenders will not ask the borrowers for automatic drafts from their bank accounts in order to be eligible for the loans.
Both the tribes have several payday lending companies. The tribes and the lending companies were sued for deceptive trade practices by the Federal government in 2012. The agreement approved by a District court judge based in Nevada is a measure to rectify these practices. The reason behind them originate from the fact that American Indian tribes believe they are exempt from State laws and payday lending companies try to align with them for the same reason.
It's interesting to note that many of these lenders are not part of the tribes and merely pay them a portion of the profits in lieu of the partnership. That was the case with these two lending companies in question, which were owned by race car driver Scott Tucker. Unfortunately, The Oklahoma Department of Consumer Credit, which is responsible for regulations on payday lenders, cannot really regulate firms owned by tribes.
There are many consumers who have fallen prey to these companies, but because of their sovereign status there has been no legal action. One of the companies from Miami tribe was supposedly drafting bank accounts of borrowers even when the payment wasn't due or in some instances, when the loan was already paid off. Now that there has been a settlement with the FTC, users can look forward to more ethical practices, especially when it comes to debt collection.
However it is in consumers' best interest to find out more about online payday lending firms, their legal status in the state etc. It's advised that they only borrow from regulated firms in the state to avoid such hassles and trouble in the future.
About Eric Wolff
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