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Payday Loan and the FDCPA

Mark Cappel
UpdatedApr 2, 2024
Key Takeaways:
  • View anything told to you by a debt collector suspiciously.
  • Know your rights under the Fair Debt Collections Practices Act.
  • Consult with an attorney, if you feel you were the victim of illegal debt collection methods.

Are debt collectors for payday loan companies subject to the FDCPA? I'm a little scared and confused. Please help!

I was contacted by a "law firm" stating I owe a payday loan in the amount of $510. I asked who was the original creditor, who they said was a payday loan company. They threatened to issue an order for a worthless check in the state of Florida for failure to pay my loan back. After doing some research, I called them back to tell them they are in violation of the Fair Debt Collection Practices Act, and the lady literally told me that the FDCPA does not apply to them, said if I didn't want to pay the money, they would issue the order. I am honestly a little confused and a little scared about this. I reside in Florida. Please help!

In general, do not believe legal advice given by creditors or collection agencies, even if they call themselves lawyers. The information is usually wrong or incomplete, and is always self-serving.

First, I will answer your question assuming the person who contacted you works for a collection agency or law firm. Second, I will answer your question assuming the person who contacted you works for the original creditor -- the payday loan company.

Payday Loan Collected by a Collection Agency

The person you spoke to on the telephone said they were not covered by the Fair Debt Collection Practices Act (FDCPA). Let us take a look at who is covered by the FDCPA. Section 802(e) of the FDCPA reads, "It is the purpose of this title to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses."

As we see, the FDCPA covers the behavior of debt collectors, as the name of the act would imply.

Section 803(1) defines a debt collector. "The term 'debt collector' means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another."

Later in this section, Congress excluded employees of the creditor, which we will discuss later. But getting back to 803(1) the definition of a debt collector is broad and inclusive. If the person who called you was attempting to collect debt owed to another, then that person is a debt collector. There is no exclusion for law firms or payday loan organizations.

Therefore, if the person who called you works for someone other than the original creditor, they are subject to the FDCPA. If the caller harasses you or continues to misrepresent themselves or the law, you may have a cause of action against the creditor. ("Cause of action" is lawyer-speak meaning you have a darned good basis for a lawsuit.) Consult with an attorney in your state to discuss this possibility. To learn more about the FDCPA and your rights as a consumer, visit the FDCPA page.

Let us go a step further and assume you were speaking to an employee of a law firm. If the person you spoke to was calling on an attorney's behalf, then that person creates liability for that attorney if he or she violates any laws or rules of conduct. If the attorney told his or her employee to lie to you, then that attorney may be in violation of his or her state's professional responsibility rules.

If the attorney's state follows the ABA Model Rules of Professional Conduct, he or she may have violated Rule 8.4(c), which prohibits engaging in conduct involving dishonesty, fraud, deceit or misrepresentation. I would argue an attorney violates ABA Rule 8.4(c) when the caller stated that FDCPA does not apply to them.

Violating professional responsibility rules do not create a cause of action for you, but giving a detailed and factual report of a rules violation to an attorney's state bar usually creates an investigation, which may cause that attorney to modify his or her behavior.

The next time the person who is says he or she is calling from a law office, ask for the caller's full name, the name of the law firm, the state where he or she is licensed to practice law, and his or her bar number. You are free to report the attorney to his or her state bar association with the facts you gather.

Payday Loan Collected by the Original Creditor

Under the FDCPA section 803(6)(A) and (B), employees of the original creditor are exempt from its provisions unless they collect the debt under a different name. For example, if the original creditor is ABC, and ABC's collection division uses the name XYZ when attempting to collect ABC's debts, then XYZ must comply with the FDCPA.

Here, if the person who called you is an employee of the payday loan company, then if they said they were calling from some organization other than the payday loan company, then they are subject to the FDCPA.

However, if the caller was an employee of the payday loan company, and in the name of the payday loan company was collecting the debt, then they are not subject to the rules in the FDCPA.

Florida Statutes

In many areas of law, the states are free to create tougher laws than Congress has written. You mentioned you are in Florida. Under Florida 559.72(10), a debt collector may not "Use a communication which simulates in any manner legal or judicial process or which gives the appearance of being authorized, issued or approved by a government, governmental agency, or attorney at law, when it is not".

I do not know if "issuing an order" is a legal process for handling bad checks in Florida. But to step back further, I don't know if defaulting on a payday loan in Florida is handled by the same code or law that covers writing bad checks.

Under Florida 559.72(12), a debt collector may not "Orally communicate with a debtor in such a manner as to give the false impression or appearance that such person is or is associated with an attorney".

If the person you spoke to is not working for a lawyer, then he is in violation of Florida's law. Again, as mentioned above, the next time this collector calls, attempt to learn all you can about his employer.

Editor’s note

Comments on this page are closed. See Payday Loans to learn how to handle payday loan collections. See the payday loan resources for California, Florida, Illinois, Massachusetts, Missouri, New York, Texas, and Virginia to learn more about payday loan laws in those states.

If the person is lying about working for an attorney, then you may have a cause of action under Florida law.


Negotiating with a creditor is a skill you can learn. Read Debt Negotiation and Settlement Advice to understand the techniques and tactics that will make you a more effective debt negotiator.

Payday loans

Finally, I hope you never have to walk this road again with another payday loan. Read All About Payday Loan Default to learn more about freeing yourself from the payday loan trap. also offers more information on the Payday Loan Information page, and has answered reader questions about payday loans in California, Florida, Illinois, Massachusetts, Missouri, Texas, and Virginia.

If you do not repay a payday loan, the payday loan company has several legal remedies, including wage garnishment, levy, and lien. See the resource Collections Advice to learn more about the rights of creditors and debtors.

I hope this information helps you Find. Learn & Save.



Did you know?

Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Housing debt totaled $12.612 trillion and non-housing debt was $4.891 trillion.

A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.

Collection and delinquency rates vary by state. For example, in Georgia, 18% have student loan debt. Of those holding student loan debt, 9% are in default. Auto/retail loan delinquency rate is 6%.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.



aamy, Oct, 2012
I too have had a person representing themselves as someone of legal authority. He said they were going to file for a warrant of arrest if I didn't pay the whole $997 by Monday. Live in Wyoming and they are 4 years old! Wondering if this is true? They said it was a bounced check and I could file it in my bankruptcy.
BBill, Oct, 2012
When a threat of arrest is made by someone other than a properly vested legal authority, especially by someone collecting on a debt, it is grounds for strong suspicion.

Start by contacting the Wyoming Division of Banking. You can file a complaint against a collection agency using a form they have online. You should also be able to speak with someone and get good advice.
rrobert, Mar, 2011
Valid Information . I like the blog.
DDebt Collection, Mar, 2011
valid information. really interested to see article.
BBad Credit Repair, Mar, 2011
An extremely well discussed article about payday loans. Like in the article it is better to learn the state FDCPA statute before venturing on deciding either way. In any case whichever law, state or federal whichever favors the consumer more is taken into account.
LLemon Law Help, Nov, 2010
Good Information blog... Please keep posting
FFDCPA, Nov, 2010
Good Information... Thanks for sharing.
CCalifornia Lemon Law, Nov, 2010
Good information... thank you!
GGeorgia Lemon Law, Nov, 2010
Great Information... Please post more... Thank you
DDebt Collection Laws, Nov, 2010
Great Information to read, Please share ur opinions.