Can A Payday Loan Lender Come After Me For Someone Else's Debt?

Anyone who has taken out a loan of some sort has probably been asked to provide two or three references on the credit application. Payday loan lenders are one of the many creditors who will ask an applicant to do this.

This information isn’t collected so the lender can call the applicant’s references to ask if they are a good candidate for a loan. No, it’s not the same as an employer who may call a friend or family member to make sure the potential employee is responsible and a good fit for the job. In fact, it’s the opposite.

Payday loan lenders, along with many other credit issuers, gather this information for the purpose of having someone to call when the borrower defaults on their loan payments. So what happens when you are not the borrower, but the reference?

Payday loan lenders and all other debt collectors are bound by the Fair Debt Collection Practices Act which governs what they can and can’t do in an effort to collect a debt. The law states that although they can call you as a reference, they are not allowed to disclose the fact that your friend or family member is past due on a loan or credit card account. The collector will call you if the person who listed you has moved and they are looking for a current address. They will also call you if the debtor has had a change of employment or their debt collection notices have been returned.

So what recourse do you have when the phone starts ringing off the hook and you are not responsible for someone else’s debt? Assuming you are not a co-signer, you do have options to get the phone calls stopped and the collector off your back.

Collection agencies are breaking the law if they try to get you to pay someone else’s debt. You are not the debtor, nor are you responsible to pay them anything. If and when they call, tell them to stop calling you, get the name of the agency they are calling from, and let them know that you will report them to the state’s Attorney General’s office if they don’t leave you alone.

Retailers who call you need to be informed that you have no connection to the account that your name should be removed. If possible, have the person who listed you as a reference call the retailer and remove you from the account.

If you find yourself being contacted by a payday loan collector because someone put you down as a reference, be clear that you want to be taken off their call list as well as the reference list. For many people payday loans are a great way to take care of financial emergencies and unexpected costs, but for others, it becomes a problem to pay back and ends up in collections.