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A payday loan is a short term loan that ranges from $200- $1000 and is usually repaid at the borrower's next payday. The borrower is often a middle-class American who is just a little short on cash and needs some money for a daily expense or a minor emergency. These loans are supposed to be a quick fix for those financially tight situations, and aim to help men and women in need. There are no restrictions on how these loans can be spent, making them the perfect solution for many situations.

The DFI has reported recent complaints from Americans who say that they have been receiving threatening scam calls from collectors at small amount loan companies. One of these calls entailed threats of imprisonment and demanded the borrower to repay funds immediately or legal action would be taken. Some customers have reported being hampered with calls, and receiving multiple phone solicitations from paycheck advance companies every day. Not only did this cash advance company call the borrower, but they harassed his family as well, and multiple relatives were bothered with phone calls.

The company making these obnoxious and rude phone calls was not registered and licensed with the Washington State Department of Financial Institutions.

Collections companies are required to comply with the Federal Fair Debt Collections Practices Act, and if a company fails to operate on these grounds then the company needs to be corrected. Borrowers who have experienced unethical treatment from a collector should notify the Federal Trade Commission.

It is very important that Americans make sure to notify government authorities if they experience trouble with an online payday loan. These loans can be a great benefit to men and women in precarious financial situations who just need a bit of money to tie them over until the next paycheck. Other times, these companies can become difficult to work with, especially if the company is in possession of one's social security and bank account numbers.

Still, this is not a warning to abstain from taking out online payday loans. In fact, these loans can be very helpful. The key is to look for a licensed, reputable company and make sure that that company possesses a secure system. Also, customers of online payday loan businesses must have a plan to repay the loan when it is due. Those who procrastinate on repayment often get into trouble. If borrowers are smart, they can enjoy the benefits of a payday loan without the hassle of collector's agencies or debt.