Before 1833 people could be locked up for owing money to the wrong people. Then Congress banned these “debtor’s prisons” and America was a better place because of it. Modern day loan companies are trying to bring back the bad old days, and in Utah lenders are trying to manipulate the legal system to arrest people who default on loans.
How can this be possible?
Shady, predatory lenders have shown they have no moral issues with bending or breaking whatever laws are needed to keep you trapped in the cycle of debt.
Now it seems they have one more weapon for their arsenal against you – jail.
Abusing the Utah Legal System
Since it is still illegal to lock people up for owing money, the lenders in Utah have taken a different approach. They file a suit in small claims court against the debtor.
Many of the people being charged are low income citizens. Often times they cannot take time off work, or find childcare, to drive to a different city for a court date. Sometimes they are not even given notice!
Once a court date has been missed, the debtor can be arrested.
This is not a one time event, not something only done in very certain cases.
For one particular loan company (that we will not mention by name) it is the way they do business. They filed 95% of all small claims cases in South Ogden, Utah.
Will this Horrible Practice Spread to Other States?
This is not just one company working the system for its own financial gain, this is a growing trend.
For now it seems to be based almost entirely in Utah. Between September of 2017 and September of 2018, high interest predatory lenders were responsible for 2/3 of all small claims court cases throughout the entire state.
It won’t be long before it spreads to other states.
What can you do to protect yourself?
First thing is to avoid these shady lenders in the first place. When times are tight and you need a quick loan, try the banks and credit unions first. If that falls through and you need to find an online lender, DO YOUR RESEARCH before signing any documents!
A quick Google search for the company you are considering might change your mind.