Payday loan companies routinely threaten to “file hot check charges” when a borrower misses a payment.
But can a payday loan company really file hot check charges against you?
And if so, under what circumstances?
PRE-AUTHORIZED PAYMENTS ARE THE SAME AS CHECKS
In years past, payday loan companies would get actual post-dated paper checks from borrowers. But these days, most payday loan companies have you sign paperwork authorizing them to draw the payment out of your account via ACH. For purposes of the hot check laws, checks and pre-authorized payments are treated the same.
TEXAS ISSUANCE OF BAD CHECK LAW – PENAL CODE 32.41
You violate this law only if you write a check (or authorize a payment) and you know at the time you write the check (or authorize the payment) that the check or payment will bounce.
In the payday loan situation, where you authorize a payment to be deducted on some date in the future, the only way you could possibly break this law is if you actually knew, at the time you authorized the payment, that the payment would bounce.
TEXAS THEFT OF GOODS OR SERVICES LAW – PENAL CODE 31.06
You violate this law only if you purchase goods or services with a check that bounces or if you purchase goods or services by authorizing an electronic payment and the electronic payment bounces.
In the payday loan situation, you are not purchasing goods or services so this law doesn’t apply.
YOU CAN SUE A PAYDAY LOAN COMPANY FOR FALSELY THREATENING HOT CHECK CHARGES
In the payday loan situation, it is almost impossible to violate either hot check law. And it is illegal for a payday loan company to threaten to prosecute you when you haven’t broken the law.
In Texas, you can sue payday loan companies for making illegal threats. And the best thing about this type of lawsuit is that it doesn’t cost you a dime.
We take this type of case on contingency. If we win your case, the payday loan company has to pay our fees. If we don’t win your case, well, then we don’t get paid.
Either way, it’s free to you.
LET US REVIEW YOUR LOAN AND PAYMENT HISTORY
Are you wondering if the payday loan company can really file hot check charges against you?
Are you just trying to figure out how to make them stop so that you can pay them?
Fill out the contact form at left, and we’ll review your situation. We will tell you where you stand and what your options are. It’s completely free, and there is no obligation.
So what do you have to lose?