Payday Lenders take a Shot at Debt Collectors

An association that represents payday lenders issued a press release Friday denouncing the collection practices of some of the very service providers that represent them.

The Community Financial Services Association of America (CFSA) — an organization representing “reputable storefront payday lenders” – was responding to a recent article in the Wall Street Journal highlighting the practice of issuing arrest warrants for some debtors that have been sued by debt collectors.

“It is simply wrong to pursue criminal complaints against consumers who have defaulted on personal debt,” said D. Lynn DeVault, board chair of the CFSA. “Lenders should be working with their customers to figure out a solution. Our members offer borrowers an extended payment plan at no extra cost to the borrower and adhere to CFSA Best Practices which prohibit any criminal recourse.”

The group noted that its Best Practices state, “A member will not threaten or pursue criminal action against a customer as a result of the customer’s check being returned unpaid or the customer’s account not being paid.”

The CFSA said it would support efforts to bar these aggressive collection practices.