Arresting individuals — or threatening to do this — over unpaid debts happens to be unlawful in Texas for decades now. Yet, which haven’t stopped payday loan providers from utilising the justice that is criminal to follow significantly more than 1,500 borrowers into the state.

Payday loan providers are regularly looking at the courts looking for charges that are criminal borrowers do not have the funds to settle their loans on time, a written report from Texas Appleseed discovered. Such fees may lead to arrest and on occasion even prison time in the event that courts choose pursue an incident.

“as well as their crazy prices and lending practices, pay day loan companies are illegally utilizing the unlawful justice system to coerce repayment from borrowers, ” stated Ann Baddour, manager of this Fair Financial Services Project at Texas Appleseed.

While just a part of these borrowers really find yourself serving prison time, Appleseed stated that threats of unlawful fees are an ideal way to force debtors to settle the loans, that could carry effective APRs in excess of 500%.