Payday lenders are legally allowed to contact your workplace to confirm your employment, but they will always be discreet about it and never mention the purpose of the call. This is part of the underwriting process, where the lender is trying to verify your details and sign off on the loan. Debt collectors, on the other hand, can call your workplace to pressure you into making a payment, as long as they have no prior knowledge that their workplace does not allow such calls. Many potential applicants for bad credit payday loans are concerned that when they apply, the lender will contact their employer.
However, according to the Consumer Financial Protection Bureau, this is not the case. The Bureau states that no one can be arrested for defaulting on a payday loan, as all loans are subject to affordability checks and traditional credit checks. If you are receiving annoying phone calls about a payday loan debt you owe, you can send a stop communication letter to the payday loan company or debt collection company and the calls should stop. Employment is a key factor in getting payday loans online, so it's important to check it out for a prospective lender.
Your lender will never contact your employer when you apply for a payday loan or short-term financial product. Defaulting on a payday loan can result in bank overdraft fees, collection calls, damage to your credit score, a day in court, and a garnishment of your paycheck. If the payday loan company ignores your letter or violates any other FDCPA debt collection rules, report these actions to the Federal Trade Commission, the CFPB, and your local state attorney general.
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