Find out exactly what income they used and if you were being processed for HAMP and the exact reasons for being declined. It sounds like your ex-girlfriend obtained a default judgment see above because you failed to answer the small claims suit. My issue is similar to one above. The sheriff will simply show up at your house. She said well good luck nd they would be here to pick me up within 2 hours. They new all of my info previous addresses, previous work places, previous numbers, etc … but only made me say the last 4 digits of my SSN. What am I missing what income did they consider before the trial that is not enough.
What exactly is a payday loan? A payday loan is a short-term form of credit that can get you cash quickly, even if you have bad credit or a low income. Please read the original post carefully. Absent fraud, you cannot be arrested for merely defaulting on a loan. Many times, the callers aren’t actual debt collectors, but . Bad credit payday loans 5 September We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias.
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I am calling my bank now. Also who should I contact about my credit being safe? Those calls sound less like debt collectors or even scammers and more like harassment. Again, if you feel threatened, you should contact local law enforcement. Thanks to everyone for sharing their experiences. The best way to protect yourself from scams is to be informed! Please see some of the comments above. Your attorney will be able to tell you if you can be arrested in Tennessee for defaulting on the loan.
Hi, I have received call from a credit company at my job today. Can they do that? See the messages above. In most cases, callers threatening to arrest you for defaulting on a debt are simply scammers. I keep getting a call from a Mr. He said I took out a payday loan in January of and never repaid it. I have not had anyone try to contact me in any form about a loan that I still owed. I have had payday loans but paid them back.
He said they buy lots of accounts from payday lenders and because he has my banking info and ss and contact info that it is a legitiate payday loan. He also told me that they would notify me of the loan company once the papers are filed and a court date was set because they would prosecute. He keeps on and on and on. For legal advice, you need to speak with a local attorney.
As a general matter, this seems to fit the model of the scam the FBI described in the cut-and-paste above. If it is a scam, ignoring the caller usually works. Engaging with or arguing with them only encourages them. If it is a legitimate debt collector, your attorney can tell you how to request a verification of the debt and how to deal with the debt if it is a legit obligation.
I got a calls several in an hour, to home and cell yesterday from Integrity Group and Associates they also called my sister said I used her as a contact and they called my husbands cell. Stating that I was going to be served with papers on a lawsuit at my home or place of employment or wherever they can find me. For a payday loan that was taken out Nov. All they guy said was that I was going to be served papers, and would be charged with check fraud, etc.
He also put me on hold several times!! I was transfured to this department and made payment arrangements with this lady.. I gave her my debit card number and did the whole recording thing. They new all of my info previous addresses, previous work places, previous numbers, etc … but only made me say the last 4 digits of my SSN. He was yellling at me and I told him to stop, asked the original collectors name and he said the same name that I had just talked to this other comp about. While on the phone our house phone rang agian and it was the same recording!!
I also called the FTC and reported both numbers. The statute of limitations on debt collection in Wisconsin is six years from the date of the last payment.
Promising to make a payment but rescinding that promise is not likely to constitute a payment. I advise you to speak with a local bankruptcy attorney. Some of the calls you are getting may be scams, others may be for legitimate debts you owe. Your attorney can help you with the latter and reassure you about the former.
In I made an online payday loan n because of personal problems I close my bank account n as time went by I completly forgot about the loan. Three days ago I get a call from a lady saying that a warrent has been issue doe arrest for internet fraud n if I dont pay I will b arrested within hours. I have not been able to sleep since than, can they do that? Im not working, I cant even afford to pay a lawyer. No, you cannot be arrested for simply defaulting on a payday loan. Most of the callers threatening arrest are scammers and the FBI is aware of them.
The most I can do is recommend you speak with a local attorney. Your city, state, or county may have resources available for indigent clients who cannot afford to pay an attorney. She gave me number to call with a file number and when i called they told me it was about a payday lone i took in if i dont pay it now with a prepay card they are going to take me to court and i will be charge with fraud and bad check i want to know can they send me to jail for it.
I also want to ask will a pay day loan fall of your record after 5 years? It could be a legitimate debt being worked by an unethical debt collector who is violating the FDCPA. In either case, the threat of jail is all bark and no bite unless you actually committed fraud. Regarding your credit reporting question, it depends on the lender. There are exceptions, but none that I know of for payday loans.
My husband has been getting calls from a Mr. Taylor in GA about a payday loan he had in which he thought was paid, I explained that I just found out about this we are recently married and shortly together and would be happy to handle it for him, which he gave this Mr. Taylor permission to talk to me and handle this issue. I told him that I would be happy to pay Its pm now and I am still waiting on a call back, what do you think?
In Wisconsin and in most jurisdictions , the most the creditor can do is sue and obtain a judgment. The methods for collecting on the judgment vary from state to state, but garnishments and bank levies are the most common. Again, most arrest threats are made by scammers. As always, the only legal advice I will give on this blog is to contact a local attorney. Hi a debt collector called left a voice mail on my phone saying that they will send a police officer to sign some paper work to bring me to court is that true?
Of course, your situation may have some unique facts. We both have defaulted on payday loans a couple of years ago. He called her employer and told them that she is being investigated for bank fraud. I have no idea how the state works. Could he be legit? Or is he trying to scare her? She said she was a process server, and that she had a summons that she was going to serve on me. I asked for what and she said Check Fraud. She gave me an number to call and a case number.
Which when I called, it was the wrong number and they asked for my social, which I gave-like an idiot. Then they transferred me to legal. He told me it was from a cash loan from and that after 2 attempts to collect-the account had been closed and that amounted to check fraud. He put me on hold and came back with repayment options. I asked if I could think about my best option because he insisted it be a bank account they could take the amount from every month-i could not send money orders and he said he could give me a 24 hour hold on the summons but that was all.
Does this sound legit? And I feel very uncomfortable giving them my banking info. Is there a statute of limitations on when they can sue me? This is from If it were a criminal complaint, it would go through your local D. The debt collector may sue you in civil court, but that would simply result in a money judgment, not jail time or a fine. If it is a legitimate debt, the Statute of Limitations in your state may have run. Your attorney can give more information on that.
You should never give out personal information like Social Security numbers or bank account information to strangers on the phone. See the info from the FBI in the original post. If you feel someone is trying to scam you and you feel unsafe, you should immediately contact law enforcement. For legal advice specific to your individual situation, contact a local attorney.
So right away new was scan and hung up. Now though get relentless calls and finally decided to pick up and was from same number that originally called for loan and same guy. Guy got rude and so I just simply hung up. An just make sure I was covered call state and local police. They said it was scam and ignore it as well. All calls come from same MO number too. Thanks for sharing your experience. The more information consumers have, the less likely they are to fall victim to scams. I had the number written down and when I looked it up online I found messages from others claiming that this was a scam.
I went online to the actual CashnetUSA site and one of their agents told me in an online chat that she had no record of anyone from CashnetUSA calling me after March 3 If you are afraid someone unauthorized has access to your bank accounts, you should speak with your local law enforcement authorities and your bank.
If the caller already had your information, he would not have had any reason to call you. The goal of most of these scams is to get you to send money.
Phishing scams are different, in that they typically try to get personal information from you such as account numbers or passwords. I have another question. I got two loans online from two companies: I looked these two loan places up today and found that neither of them are licensed in Virginia. I know that VA state laws apply to them. What do I do? I can only give general information. The answer to your question will depend entirely on Virginia state law and I am not licensed to practice law in Virginia.
For legal advice specific to your situation, you need to speak with a local attorney. Over the past 4 days my family and now my Human Resource department has gotten calls from a number stating they are trying to reach me regarding unpaid debt. I contacted the company and they state I am being sued from the Bank of Delaware from a transaction I made in I asked for an email or letter with details of such transaction and they told me they dont have to send it to me.
He gave me all my options and I told him I need to research. Can I be sued for fraud for some transaction back in I think they are a pay day loan placye not sure, I got one payday loan years ago, but paid that thing off as a fast as I could.
I have asked for everything in writing to so I can investigate it before I pay anything. Im hoping I did the right thing. If you could track them down, you may be able to get law enforcement involved, but finding them is the hard part. In that case, you should speak to a local consumer bankruptcy or consumer protection attorney to learn about your potential remedies. I received a call today from a place called ACS, but it was for my sister insisting I get a hold of her and she would have 2 hours to get the default on her loan taken care of before going into litigation.
Stupidly, I gave them my credit card number but had the nagging feeling all day that something was not right. I saw your website and called my credit card company immediately and cancelled my card. The payment had not yet gone through and the rep and I felt the best thing was to have a new card re-issued since my sister will be contacting a lawyer to follow up on this.
I was completely unaware of things like this happening but your website helped to clear up a lot of questions I had. I have one more question: I told my employer about my loan situation and she suggested not paying back the loans. They are illegal loans, but is it a good idea to not pay them back? Or will that get me into trouble? You need to speak to a local attorney if you want competent legal advice.
Most of the time, these callers are scammers looking to scare some money out of you. In either case, the worst they can do is sue you for the amount owed. If you have questions or want legal advice specific to your individual situation, you need to contact a local attorney.
The caller may be serious, but it sounds like a scam to me. In that case, you should contact an attorney to learn about your remedies. In trying to help out an employee, I wrote her three checks to two different Colonial and American Loans. Each check for 3 loans. I have that in a written letter after the employee refused to leave without it. Have you ever heard about this? We live in Oklahoma.
My husband is receiving calls from a debt collector that says that they are going to procecute him and that he would be arrested for check fraud….. Can he be arrested for not paying this back??? I had a person calling to collect on a pay day loan I had defaulted on after I lost my job. I offered to make a payment arrangement. When I called them about it they said I had til 3 pm or they would serve me papers along with someone from the county.
You cannot go to jail for simply defaulting on a debt. The most the creditor can do, absent actual fraud, is sue you. I had something like this an Attorney called and left a voicemail about how there were allegations pending against me and this was on a Sunday when most offices are closed so i had a bit of suspicion and ran his number through even though i could not find the company i was able to find reviews about the number and posted a comment about how this person called me.
I have done that and that and the attorney stated that i should not do anything until i receive the paperwork and then i can consult with him. He assured me that he would keep the Payday loan company off of my back and also told me that if they attorney calls again to politely state that i can speak with him and give him the number to my attorney. I just received a call from a debt collector saying i owe a pay day loan from over 8 yrs ago.
And to my knowledge I paid all mine off. And I said to him how come no one has sent me anything? They were also calling from Texas. He had me all upset. Please re-read the original post, along with the note from the FBI. This sounds like a textbook example of a scam to me. The big red flag is the threat of arrest. If you feel threatened, you should contact local law enforcement. Ok this American Mutural Holdings called my mother on June 5 , and told her I have her down as a contact.
They told her I have a default loan with Cash America and they had all my information. They told her if my loan was not paid in 2 hours I would have an warrent out for my arrest for check fraud! She paid it with her debt card What can I do If you actually owed the money, the debt collector could have sued you, but could not have had you arrested.
If you did not owe the money, your mother may be able to get law enforcement involved. See the information from the FBI in the original post above. Keep in mind that nothing on this blog is intended as legal advice and I am not licensed to practice law anywhere but in Wisconsin.
My husband received a call tonight on his cell phone. It was a Wisconsin number but they said they were from Georgia. They stated he owed from a payday loan back from Again, any threats of jail for defaulting on a debt should raise red flags.
While check fraud is a serious matter, I have never seen such charges filed for merely defaulting on a payday loan. And your local D. If you deny you owe the money and think this is a scam, you should contact local law enforcement or see the original post above for info from the FBI.
I got a letter in the mail for failure to pay off title loan on a car that broke down n picked up by a junkyard for sitting in the side of road. In Wisconsin, failure to appear will result in a default judgment against you and the creditor will be able to collect on that judgment by any means allowed by state law.
Debt collectors do not have the authority to prosecute criminal cases. They can sue and try to collect, but cannot send you to jail. I would be in jail for hours before I seen a federal judge… is this true? Most of the calls claiming otherwise are from scammers hoping to scare you out of some money. Will I go to jail!?! Yes, the debt collector can sue if you default on a debt.
If you do get sued, check out this post: Your state procedure will likely be different, but your local attorney can help explain those differences to you. Back in I took out an online loan from cash net and defaulted on the loan. I just received a call this week from a place saying they were arbitration, and that I was to be issued a summons for intent to defraud a banking institution unless I have a payment arrangement.
I stupidly gave in and ended up giving my bank card info before reading this. Since they knew where, when, and how much the loan was for, would you assume this is just a debt collector breaking the rules, and not a scammer? Quite a few scammers claim to be collecting on behalf of CashNet. I would consider stopping that payment, letting the bank know what happened, and asking if I need to get a new account number.
Keep in mind that this is not legal advice. For advice and a legal opinion on your situation, you should speak to a local attorney. Well I contacted cash net, turns out this is not the company that bought my debt, and actually is a fraudulent collector. Thank you for responding. Thanks for doing this thread.
In New York, a law was passed making it illegal to collect on Payday loans and deemed the loans illegal and therefore void. I plan on closing my checking accounts and using a different, unrelated checking account moving forward. I assume you are familiar with the NYS law. My question is, can they hurt my credit? Or bypass State law in order to try to collect? I will write to them saying I am defaulting on the loan because I have no money at this time and would be willing to pay any principal balance leftover based on a LEGAL interest rate in my state going back to the time I took the loan out.
By this math they would owe me money. But just wanted your thoughts on if they can garnish my wages or hurt my credit score? I am not licensed to practice law in New York and have no knowledge of any New York state laws. In general, payday loan businesses must comply with the laws of any state in which they do business. If the lender has a valid claim against you, it can pursue whatever remedies are available under state law. In Wisconsin, that would include wage garnishments.
If the claim is valid, the lender could also report accurate information to the credit reporting agencies, although it is not required to report anything. Whether or not this claim is valid is a question of state law, and you would have to consult with a New York-licensed attorney for advice.
Today I received a call from United National Arbitration stating I had two charges pending against me and my case was review by the D. Stated I have till tomorrow a 3 to make payment or case will be sent over to D. Can this really happen??? Besides, defaulting on a loan is not a criminal matter.
Unless there are facts to indicate some kind of fraud, the D. I have received calls for more than 6 months now that are similar to this. I took out a pdl online in I was unable to pay the loan back fully. For months now, I keep getting the same phone calls. Usually, it is within a couple of hours. These people had my correct phone number, current address, last four numbers of the bank account that the loan went into, etc… The options she gave me were to settle out of court right then by setting up a payment arrangement.
I told her that I was uncomfortable giving out any pay information or making payments to anyone that I was not absolutely sure was legally the collector of the said debt. I simply asked them to send me documentation to legitimize their claim. They said that as soon as I make a payment they would e-mail me a copy of the payment plan. I wanted a paper trail showing where and how they eneded up with my account and the authority to collect on it.
She became irate and flat out, ominous toward me. I finally just told her to serve me so that I would at least have some sort of leagal documentation and nothing ever came. He did not want to send me any paperwork and accused me immediately of being uncooperative. So I just hung up on him. I asked for an address and she ignored the question and just said that she would be by to serve me. Typically, calling them back only encourages them to continue calling.
If you just ignore them, they should stop after awhile. I called them to tell them that the loan should have been paid back and they said that whole time I was paying interest on the loan.
So at that point I changed by account no. Now today this guy calls me and said his client was reporting me for Check Fraud charges because I changed my account No. So Question is can they report me for check fraud when all i was doing was trying to protect my account?
The caller sounds like a middle school kid tattling to the teacher. The debt collector could sue you or can contact the D. But unless you actually committed fraud and as far as I know, simply defaulting on a loan does not constitute check fraud in any jurisdiction , the D.
Keep in mind that I am not licensed to practice law anywhere but Wisconsin, and I do not give legal advice on this blog. For advice specific to your individual situation, you need to contact a local bankruptcy attorney.
I am a former employee of a PayDay Loan company and their collection efforts are one I would not do. I had never worked for a finance company like that so I went in clueless. Quickly I learned that is not a place of employment if you have a heart. Threats are their biggest tool. Get a number and name — immediatly call your State Banking Department and report the call. When the person calls you back inform them that you forwarded their collections threats to you State Banking Department and from that moment on make a note of any call you receive time date persons name and what was said.
It is illegal for them to threaten you with any type of threat. Also they will continue to harass your refences — let each one of your references know when they call them to inform them they do not wish to be contacted any longer and to remove them from the call list.
If they continue to call the references you report that as well to the State Banking Department. If they are calling you at your place of employement you can tell them not to contact you there anymore. Legally they have to stop sometimes it is a good idea to fax to local branch a letter stating no more contact at your work keep a record of that and if they continue make sure you report that to the State Banking Department.
Keep in mind that they are only allowed to contact you twice a day. With leaving a voice message once. These companies are audited by their State Banking Departments.
If complaints are being filed against their collection efforts then audits are more frequent cause all complaints have to be investigated. Things happen not everyone is perfect… They are about profit and money with no concerns for the customer. By any means possible. That is their motto. You have rights take a stand.
When they do — they become the criminal not you. The only legal route they can take is a Small Claims that results in a Garnishment. Most states require you to pay the full amount including interest — rewrite the loan — and then return the amount minus the interest. In most states thats illegal. Check with the regulations in your state — if no roll overs are allowed and you have done that — let the State Banking Department know you have done it with the company in the past.
If they want to threaten you with criminal charges they obviously have no concern for you — so why have concerns for them. Keep in mind that the tips provided by theinsidescoop apply only if the caller actually works for the creditor.
Many times, these calls come from an overseas call center that have no connection with the original payday loan agency. These scammers should be ignored, although it is sometimes difficult to determine who the caller works for.
If in doubt, call the original creditor not the number left on your voicemail and ask how much you owe and if they have passed the account on to a debt collector. I received a phone call yesterday from a man claiming to be from a law office in Georgia. I was very taken back by this as I did not take out and loans I did apply when money was tough but never received any money or at that even completed an application.
I called my bank to see if there were any transactions at the time of when he is claiming they gave me money and my bank confirmed what I already knew there were no transactions on that account for three months surrounding this supposed incident.
I called the man from the law office back and he is now changing his story saying that they probably put the money into a different account but used mine as collateral. I never had a different account and as well I never had a single payday loan. He says that I will be brought up on criminal charges for this loan and that I should get a lawyer. Im worried about what to do to get this taken care of.
I know im not guilty but he is claiming they have evidence and wont let me see the evidence or even tell me what the proof is. What should i do? Please read the original blog post. These calls are typically made by scammers, hoping to shake some money out of you or your relatives. I took out a online payday loan and missed a payment well it bounced in the acct I only missed it by two days they called and gave me a case number and said I will be arrested by Monday can I be arrested the loan was only and I tried to pay the payment I missed they refused to accept it unless it was and I had to pay a additional next week they said it was theft?
Regardless of what the payday agent tells you, defaulting on a loan is not fraud without other facts to back up such a claim. If you are concerned, you should speak to a local bankruptcy attorney. In the meantime, you should stop taking payday loans, either online or in person. They are a sure way to get in over your head with debt.
Area code was from nc though. Said in we took a cash advance loan on line. She would not give us any information except she work for weistein atterney and was a mediator for fraud She would not give me her address. She would not give me atterneys name and how many atterneys worked there. We asked for a letter stating what is the debt and what is going on. She said she can not give us any information.
She new my husbands full SS number. When I asked for all this information she got mad and hung up. I repeatedly call her and no one would answer.
A few hours late a man called from her number and said he had to inform of me he was pressing charges for me repeatedly calling a business. U said you are pressing charges on me for calling a voice mail that know one would answer. He said yes mam and hung up. I reported to the FTC.
They thought it was a scam. I agree with the FTC rep; this sounds like a classic scam. Generally, these people will move on to other targets if you simply ignore them. I received a call earlier from someone claiming to be a deputy calling me to turn myself in or call a officer in Texas. He called from which I found weird. I also received a call from a law firm a few weeks ago stating I had a warrant over a payday loan that I know I never had.
Without some indications of fraud, defaulting on a loan is not grounds for criminal charges or an arrest. They are scammers sitting in overseas call centers, hoping to scare you out of some money.
I typically advise my clients to ignore these callers, but if you are concerned, you should speak to a local attorney. I have a title loan that I recently defaulted on. Can I be arrested for a title loan default? Or are they treated add civil matters? However, the lender may have a valid lien on your vehicle and might have the right to repossess if the debt is not paid.
My mom received a message today on her phone from a guy saying he is a parlegal for an attorney firm in Pontiac,MI working with one of the prosecuting attorneys out in Henderson, NV to handle a criminal investigation case involving me. He says my name has been pulled up on two affidavits with pending allegations of one misdeamenor charge and one felony charge. He says its because the affidavits have had the statute of limitations expire on them. He is trying to get a hold of me because they have to transfer the dockets back to the prosecuting attorney who is handling the case.
He asks that she contact him with a phone number where he can reach me or have me contact him and says she is not in trouble of any kind. He asks that I call by Monday at 5PM and leaves his phone number and a case number.
I am confused as what to do. I also just got my drivers license in a new state and nobody mentioned anything to me. Does this sound like a scam to your or is it legit? Thanks for your help! For advice specific to your individual situation, you need to speak with a local attorney. Generally, these calls threatening arrest are scams. Sometimes the caller will call a parent instead of the target, hoping that the parent will pay before talking with the target.
As long as you keep the basic point of the original post in mind, you should be fine: Hi my names brittany recently i filed for a online payday loan they said i was approved an all i had to do was send in for a security deposit so i did rhan a hr later they gave me a call saying it wasent approved an i would get my back well i just got a call stating That i didnt pay The cansleation fee an was being sued with a lawsuit so they said ro resolve it to send them an they resolve The case now they called again saying i need To pay anothed for the fees to resove the Case an if i Didnt in 2 hrs They Will have me Aressted is this true an what should i do?
I hope readers realize by reading these posts that everyone should stay away from online payday loans. I was told that I was going to jail for check fraud from 5 years ago from Advance America. They are calling everyone now all my Friends and family and threatening me. I then looked them up and found this site so do I keep paying now that I have already paid? Can I stop paying then and be safe? I have no clue what to do now! Review and comparison of online casino websites.
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Polygamy, Bigamy, and Sister Wives. Can you marry anyone you want? Many customers were employees of large firms, such as railways or public works. Larger organizations were more likely to fire employees for being in debt, as their rules were more impersonal, which made blackmail easier.
It was easier for lenders to learn which large organizations did this as opposed to collecting information on the multitude of smaller firms. Larger firms had more job security and the greater possibility of promotion, so employees sacrificed more to ensure they were not fired. The loan shark could also bribe a large firm's paymaster to provide information on its many employees.
Regular salaries and paydays made negotiating repayment plans simpler. The size of the loan and the repayment plan were often tailored to suit the borrower's means. The smaller the loan, the higher the interest rate was, as the costs of tracking and pursuing a defaulter the overhead were the same whatever the size of the loan. The attitudes of lenders to defaulters also varied: Because salary lending was a disreputable trade, the owners of these firms often hid from public view, hiring managers to run their offices indirectly.
To further avoid attracting attention, when expanding his trade to other cities, an owner would often found new firms with different names rather than expanding his existing firm into a very noticeable leviathan. The penalties for being an illegal lender were mild. Illegal lending was a misdemeanor , and the penalty was forfeiture of the interest and perhaps the principal as well.
But these were only ever imposed if the borrower sued, which he typically could not afford to do. Opposition to salary lenders was spearheaded by social elites, such as businessmen and charity organizations. Businessmen were encouraged not to fire employees who were indebted to loan sharks, as they unwittingly supported the industry by providing lenders with a means of blackmailing their customers "pay up or we'll tell your boss and you'll be fired".
Charities provided legal support to troubled borrowers. This fight culminated in the drafting of the Uniform Small Loan Law, which brought into existence a new class of licensed lender. The law was enacted, first in several states in , and was adopted by all but a handful of states by the middle of the 20th century. Lenders had to give the customer copies of all signed documents.
Additional charges such as late fees were banned. The lender could no longer receive power of attorney or confession of judgment over a customer. These licensing laws made it impossible for usurious lenders to pass themselves off as legal. Small loans also started becoming more socially acceptable, and banks and other larger institutions started offering them as well. In the s and s, American prosecutors began to notice the emergence of a new breed of illegal lender that used violence to enforce debts.
The new small lender laws had made it almost impossible to intimidate customers with a veneer of legality, and many customers were less vulnerable to shaming because they were either self-employed or already disreputable. Thus, violence was an important tool, though not their only one. These loan sharks operated more informally than salary lenders, which meant more discretion for the lender and less paperwork and bureaucracy for the customer.
They were also willing to serve high-risk borrowers that legal lenders wouldn't touch. Threats of violence were rarely followed through, however.
One possible reason is that injuring a borrower could have meant he couldn't work and thus could never pay off his debt. Many regular borrowers realized the threats were mostly bluffs and that they could get away with delinquent payments. A more certain consequence was that the delinquent borrower would be cut off from future loans, which was serious for those who regularly relied on loan sharks.
One important market for violent loan sharks was illegal gambling operators, who couldn't expose themselves to the law to collect debts legally. They cooperated with loan sharks to supply credit and collect payments from their punters. Thieves and other criminals, whose fortunes were frequently in flux, were also served, and these connections also allowed the loan sharks to operate as fences. Violent loansharking was typically run by criminal syndicates, such as the Mafia.
Many of these were former bootleggers who needed a new line of work after the end of Prohibition. Towards the s, loan sharks grew ever more coordinated, and could pool information on borrowers to better size up risks and ensure a borrower did not try to pay off one loan by borrowing from another loan shark.
The fearsome reputation of the Mafia or similar large gang made the loan shark's threat of violence more credible. Although the reform law was intended to starve the loan sharks into extinction, this species of predatory lender thrived and evolved. After high-rate salary lending was outlawed, some bootleg vendors recast the product as "salary buying". They claimed they were not making loans but were purchasing future wages at a discount. This form of loansharking proliferated through the s and into the s until a new draft of the Uniform Small Loan Law closed the loophole through which the salary buyers had slipped.
Organized crime began to enter the cash advance business in the s, after high-rate lending was criminalized by the Uniform Small Loan Law. The first reports of mob loansharking surfaced in New York City in , and for 15 years, underworld money lending was apparently restricted to that city. In the beginning, underworld loansharking was a small loan business, catering to the same populations served by the salary lenders and buyers.
Those who turned to the bootleg lenders could not get credit at the licensed companies because their incomes were too low or they were deemed poor risks. The firms operating within the usury cap turned away roughly half of all applicants and tended to make larger loans to married men with steady jobs and decent incomes.
Since the mob loans were not usually secured with legal instruments, debtors pledged their bodies as collateral. In its early phase, a large fraction of mob loansharking consisted of payday lending. Many of the customers were office clerks and factory hands. The waterfront in Brooklyn was another site of extensive underworld payday advance operations around mid-century.
Over time, mob loan sharks moved away from such labor intensive rackets.