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Arresting people — or threatening to take action — over unpaid debts was illegal in Texas for decades now.
Yet, which haven’t stopped payday loan providers from making use of the justice that is criminal to pursue a lot more than 1,500 borrowers when you look at the state.
Payday loan providers are regularly looking at the courts looking for unlawful costs whenever borrowers do not have the funds to settle their loans on time, a written report from Texas Appleseed discovered. Such charges may lead to arrest as well as prison time in the event that courts choose to pursue an incident.
“as well as their crazy prices and lending practices, pay day loan companies are illegally making use of the unlawful justice system to coerce repayment from borrowers,” stated Ann Baddour, manager associated with Fair Financial Services Project at Texas Appleseed.
While just a part of these borrowers really wind up jail that is serving, Appleseed stated that threats of unlawful costs are a good way to force debtors to settle the loans, which could carry effective APRs greater than 500per cent.