Can a Payday Loan Company File Criminal Charges?

Updated 2026-10-25 · By the Zebra Finance editorial team · How we research

Take a breath: owing money is not a crime

If you've fallen behind on a payday loan and someone has mentioned charges or arrest, here's the reassuring part: being unable to pay a loan is a civil matter. A lender's legal options are civil ones, such as collection calls and letters, passing the account to a collector, and possibly a lawsuit asking for a money judgment. Even a judgment is about money, not jail. See can a payday lender sue you.

What federal law says about arrest threats

The Fair Debt Collection Practices Act lists practices debt collectors may not use. In 15 U.S.C. 1692e:

• 1692e(4): representing or implying that nonpayment will result in arrest or imprisonment, or seizure or garnishment of property or wages, unless that action is lawful and actually intended.
• 1692e(5): threatening any action that can't legally be taken or isn't intended.
• 1692e(7): falsely representing or implying that the consumer committed a crime in order to disgrace them.

Collectors also can't pretend to be attorneys or government officials. The FDCPA applies to third-party debt collectors; original lenders collecting their own debts are generally covered by state law, and many states restrict lender threats directly.

What about a bounced post-dated check?

Bad-check laws generally target someone who writes a check knowing it will bounce in order to obtain something. A post-dated check given to a payday lender is different: both sides know the money isn't in the account yet, which is the whole point of the arrangement. Some states specifically restrict payday lenders from pursuing criminal charges over a returned payday check unless there was actual fraud, such as writing it on an account that was already closed. Rules vary; see your state on payday loan laws by state.

When criminal law can actually apply

Criminal charges relate to fraud, not to running short. Examples include using someone else's identity to get a loan, giving false information such as a fake employer or forged pay stubs, or writing a check on an account you know is closed. If you've done none of those things, you're dealing with an ordinary civil debt.

One related point: if you're ever served with court papers in a civil case, respond by the deadline. Ignoring a court order, such as an order to appear, can have its own consequences in some states.

Signs a caller isn't legitimate

• Threats of arrest, a warrant, or a visit from police over a payday loan
• Claims to be from a court, law enforcement or a "fraud department" demanding immediate payment
• Demands for payment by gift card, wire transfer, cryptocurrency or payment app
• Refusal to give a mailing address, the original lender's name, or written details of the debt
• Calls about a loan you don't recognize or already paid

Fake collectors sometimes know real details about you to sound convincing. Hang up and contact your lender using contact information you find yourself. More tips: how to spot a fake lender.

What to do if you get a threatening call

1. Stay calm and don't pay on the call. Ask for the caller's name, company, address and phone number.
2. Ask for validation. A legitimate debt collector must give you validation information at first contact or within five days, and you have 30 days to dispute in writing.
3. Keep records. Note dates, times, names and what was said; save voicemails and letters.
4. Ask in writing for contact to stop if you want. A collector may then contact you only to confirm or to tell you about a specific action.

Can a lender contact your employer or family?

Under the FDCPA, debt collectors may contact third parties such as your employer or relatives mainly to find your location, and generally may not tell them you owe a debt. They can't call repeatedly to harass you or call at unusual times, generally before 8 a.m. or after 9 p.m. your local time, without your permission. If you tell a collector in writing that your employer doesn't allow calls at work, it generally must stop calling you there.

Getting back on track

Once you've confirmed the debt is real and who you're dealing with, call the lender and ask about an extended payment plan; many lenders offer them, and some states require it. Another route people use is a personal installment loan to pay off the balance and replace a lump-sum due date with scheduled payments over several months. See how to consolidate payday loans.

Lenders in our network consider all credit types. Our form is free, takes about 3 minutes, and there's no obligation to accept an offer. See if you qualify.

Frequently asked questions

Sources

• 15 U.S.C. 1692e — False or misleading representations (FDCPA)
• 15 U.S.C. 1692c — Communication in connection with debt collection (FDCPA)

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