Can I dispute payday loan charges and fees?

You can dispute the fees--but they may not go away.

People tend to ask the "Can do I dispute payday loan charges and fees?" question when they're in financial trouble with their payday loans--many times after they've paid more in fees than the original loan was worth. An example would be having paid $400 in fees to "float" a $300 payday loan while still owing the original loan amount.

We are not legal counsel or professional consumer advocates, so we can't (and won't) advise you about your rights.

However, we will share a few things we know people have done when trying to dispute charges and fees:

Make an official complaint

You may be able to contest the fees and charges for your payday loan if the terms in your payday loan contract are in violation of your State's laws and regulations. Learn more about the laws and regulations in your State pertaining to payday loans here: http://www.paydayloaninfo.org/states.cfm. When you do your research, you may discover that the payday loan contract's terms appear to be legal--although unpleasant and potentially damaging to you. However, if you still believe the terms of your payday loan are questionable, visit your State's Attorney General's Web page to begin the process of making a complaint. (State AGs investigate fraud, harrassment, and other practices that adversely affect consumers.) This may put you in a position to dispute the fees--or it may not. We can tell you that your state's Attorney General will probably work more slowly than the payday lender, so be prepared for a lengthy process when you make the complaint.

Negotiate with the payday lender

To dispute your fees, you can try to make arrangements with the payday loan company's collections department to pay fees directly against the original loan amount. E.g., arrange to "pay down" your loan. The payday loan company, even if reasonable, will not likely want to do this. But, if you can convince them that this is the only way they are going to get their money they might agree to let you "break your contract" and pay down the loan. (If they do agree to a "pay down," get them to ammend your contract with the new "pay down" terms clearly explained--and get them to send you a copy.)

Pay off the payday loan with a lower-interest loan

Contact a local credit union and see if you can take out a longer term loan at a reasonable APR to "buy off" the payday loan from the payday lender. While this isn't "disputing" the fees in any effective way, this will solve your cashflow issue momentarily and remove you from the payday lender's collections department. If this is not an option for you, a good local credit union may be able to give you more local options to get funds.

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