Faxless Payday Loans Best Practices

When you are searching for a faxless payday loan, you want an online cash advance company that adheres to the industry’s best practices. But what are the payday loan industry’s best practices, and how do you find a payday lender that abides by them? This article will answer both questions.

The payday loan industry’s best practices have been developed by the Community Financial Services Association (CFSA). The CFSA “was established in 1999 to ensure consumer confidence in, and long-term success of, the payday advance industry. Our mission is to promote legislation and regulation that provides payday advance customers with substantive consumer protections while preserving their access to short-term credit options, and encourage responsible industry practices by requiring.”

Full Disclosure. A faxless payday loan member of the CFSA must comply with the disclosure requirements of the state in which the payday advance office is located and with Federal disclosure requirements. These federal requirements include the Federal Truth in Lending Act. A loan contract between a payday loan lender and its customer must fully outline the terms of the payday advance transaction. SFSA members agree to disclose the cost of the service fee both as a dollar amount and as an annual percentage rate (“APR”).

Compliance. Payday loan members must comply with all applicable state and federal laws. They cannot charge a fee or rate for a payday advance that is not authorized by law.

Truthful Advertising. A faxless payday loan member must not advertise the payday advance service in any false, misleading, or deceptive manner. Furthermore, they are supposed to promote only the responsible use of the payday advance service.

Rollovers. Cash advance members shall not permit a borrower to rollover a loan unless expressly authorized by state law. But where the law does permit payday loan rollover, members must limit rollovers to four (4) or the state limit, whichever is less.

Right to Rescind. Payday lenders who are members of SFSA must give their customers the right to rescind, at no cost, a payday advance transaction on or before the close of the following business day.

Appropriate Collection Practices. CFSA members are required to collect outstanding debts in a professional, fair and lawful manner. A payday loan lender cannot use unlawful threats, intimidation, or harassment to collect accounts. CFSA further believes that the collection limitations contained in the Fair Debt Collection Practices Act (FDCPA) should guide a member’s practice in this area.

Extended Payment Plan. Some payday lenders offer its customers various extended payment plans. If they do, they must abide by the CFSA code of Best Practices for Extended Payment Plans. For customers who are unable to repay a loan according to their original contract, the code requires the lender to extend the option of repaying the loan over a longer period of time at no additional charge.

Internet Lending. A cash advance member who offers payday loans via the Internet must be licensed in each state where its customers reside and abide by that state’s regulations of the short term loan industry.