Re: Payday Lending Part Deux

On May 18, 9:17=A0pm, "Bill Bonde { ''the oblique allusion in lieu of
the frontal attack'')"  <tributyltinpa...@[EMAIL PROTECTED]
> wrote:
> Bob Ward wrote:
>
> > On Sun, 18 May 2008 12:58:53 +0300, Binyamin Dissen
> > <postin...@[EMAIL PROTECTED]
> wrote:
>
> > >It isn't fraudulent like writing a check knowing there ain't no money
i=
n the
> > >bank, as the borrower plans to pay it back.
>
> > What do you call the do***ent that the borrower executes, allowing the
> > lender to collect the amount of the loan plus fees, two weeks hence?
>
> > >This would need to be a civil action unless fraud can be proven.
>
> > Offering a check for security without the funds to back it pretty well
> > fits the definition of fraud.
>
> Except that by definition someone taking out a pay day loan doesn't
> have the funds to back up the check they wrote.

 Right

> And by definition
> they are going to get those funds in their pay check because the
> pay day place checks for giving out the money.

 Right, and then they'll come back and give me the money. Indeed, I
recall most loan places are reluctant to actually deposit the check on
payday for one reason and another.

> Are you saying that
> it is 'fraud' to use the pay for something else, beer, the first
> month rent from the rent to own place next door, Pampers?

 No, of course not.

 See, here's the thing...when I go to a payday loan place, I'm not
just running "the wire" against the float like I am if I write a check
for groceries the day before payday. I'm writing a post-dated check,
one for which I have a binding agreement that's precisely what you
understand it to be, and so it's not really a check at all, not as far
as anything like "fraud" goes.

postdated check
"n. a check delivered now with a written date in the future, so that
it cannot be cashed until that date. The danger to the recipient is
that such a check is legally only a promissory note due at the later
date, and if the account is closed or short when the check is
presented at the bank, the payee has no rights to demand payment by
the bank or claim that the delivery of a bad check was criminal. "

http://dictionary.law.com/default2.asp?selected=3D1560&bold=3D%7C%7C%7C%7C

 note such language as "legally only a promissory note" and "the payee
has no rights to demand payment" and "no rights...to claim that the
delivery of the bad check was criminal."

Thus, a payday loan holding your post-dated check has no legal
standing to claim check fraud should you default on the loan,
especially given their obvious business model and the language of the
contract you sign.