Consumer complaint received 2022-06-11
Company: LCO Financial Services, LLC
State: NJ
Product: Payday loan, title loan, or personal loan
Sub-product: Payday loan
Issue: Charged fees or interest you didn't expect

Complaint:
Please note this company is violating the law and operating illegally. They have broken the following laws mentioned below : XXXX Wrongful credit practices and related offenses. 

XXXX Prohibitions for licensees. 

As a New Jersey resident, these laws need to be followed. This company is unlicensed to operate in Alaska and NJ. They are also operating as an illegal rent a tribe company which is a common scheme amongst tribal loan companies. In New Jersey, the 30 % usury limit is well within an affordable range for most consumers, making the traditional payday lending trap illegal. XXXX XXXX loan agreement is unenforceable in state courts, including New Jerseys. They need a specific lending license to operate in each state, and this tribal lender doesnt have a license to operate in the state of NJ. As a result, they cant sue me in a court that has any authority to garnish my wages or force me to pay. XXXXXXXX XXXX is illegally charging me 634.56 % in interest which I did not agree to. The XXXX XXXX is 30 % which they did not abide by. 
Its illegal to make a loan without a license. If youre not licensed, the loan is not collectable and its not enforceable. The dirty little secret among online payday lenders who violate state laws is that they can not win in state court. If someone makes you a loan thats illegal, either because they dont have a license or they violate usury laws, youre not under any obligation to pay it back. Regardless of the company youve borrowed from, payday lenders must be licensed, or the loan is not collectable. If they are breaking the law by lending wrongfully ( i.e. without a license ), you are not under any obligation to pay it back. Therefore, I am not under any obligation to pay them back. This all started from a loan application I downloaded from my app store and the emails/calls/texts began to flood in. In times of need, consumers/borrowers are not only being taken advantage of but lied to about the interest rates. I had no idea that lenders had to be licensed in the state the consumer/borrower is located until I began my research. I had no clue that most of these lenders are operating illegally and lying about being affiliated with Native American Tribes to XXXX and steal from vulnerable people by charging between XXXX  % XXXX % in interest to evade the law. They assume that people will not research their legal rights and pay blindly. Sadly, most do. 
NJ enforces the statutes that protect consumers against predatory lenders. The New Jersey payday loan / tribal loan laws are much more restrictive than the regulations in other parts of the country. Theyre one of only XXXX states that have banned the practice outright via reasonable rate caps. Fortunately, there are laws aimed at protecting borrowers against loan sharks and other predatory lenders. 

These laws cap interest rates, ban discriminatory practices, and even outlaw some types of lending. New Jersey notes that tribal lenders are not exempt from state laws relative to lending including rate caps and that any exemption for tribal sovereignty only governs loans issued on tribal land, rather than loans issued over the internet. They take advantage of people like me in desperation for financial assistance. 

I also never gave them authorization to take debit card payments from my account or ACH. I would call in the payments and they proceeded to charge my debit card without my consent. 

The faux tribal payday lending model has always been based on the mistaken belief that payday lenders could evade state laws by hiding behind Native American tribes. The Supreme Court has long made clear that tribes must obey state law when they operate off reservation, and that is true of online tribal payday lenders as well. This decision follows the path laid out by the Supreme Court in a 2014 decision showing how to enforce state law against purportedly tribal entities.

Company response to consumer: Closed with monetary relief