many thanks for visiting cnnmoney. Arresting individuals — or threatening to do this — over unpaid debts was illegal in Texas for decades now.

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In Texas, payday loan providers are receiving borrowers arrested

Arresting individuals — or threatening to take action — over unpaid debts happens to be illegal in Texas for decades now. Yet, that includesn’t stopped payday loan providers from utilizing the justice that is criminal to pursue significantly more than 1,500 borrowers when you look at the state.

Payday loan providers are regularly embracing the courts searching for charges that are criminal borrowers don’t possess the funds to settle their loans on time, a study from Texas Appleseed discovered. Such fees may lead to arrest and on occasion even prison time in the event that courts opt to pursue an incident.

“as well as their crazy prices and financing practices, pay day loan businesses are illegally making use of the unlawful justice system to coerce payment from borrowers,” stated Ann Baddour, manager for the 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 fees are an ideal way to force debtors to settle the loans, that may carry effective APRs greater than 500per cent.