A Simple Typo Put This Woman $40,000 In Debt
In an economy where desperate times call for desperate measures, sometimes a quick payday loan is the answer.
64 year old Stephanie Banks of Oregon resorted to such a thing back in the fall of a 2013. She had retired early as she was undergoing chemotherapy for breast cancer and found herself short on rent. Not hard to believe when all she had for income was her monthly Social Security benefits.
Soon after she took out the loan and with medical bills piling up, Banks had filed for Chapter 13 bankruptcy. Most of her debts were discharged, including the title loan. However, it wasn’t until August 2015 when Rapid Cash came asking for their money back. This time in the amount of $40,000 and not the original $300 she had borrowed.
“I got a letter saying I owed Rapid Cash $40,000,” Banks told Yahoo Finance. “The letter almost gave me a heart attack. How could a $300 loan turn into $40,000?” Calls from the company’s debt collection department followed. “They said they would destroy my credit if I did not pay them immediately,” she said.
What should have been a simple $300 load from Rapid Cash became a $40,000 nightmare. She may soon be waking up from this awful dream though. After two years of an ongoing court battle that has resulted in hundreds of dollars in legal fees, Rapid Cash has claimed it was all a misunderstanding.
According to the lender, the mix up all came down to a typo.
Stephanie’s bankruptcy lawyer, Michael Fuller, is working probono on the case. According to Fuller, once a debt has been discharged in bankruptcy, it’s illegal for the lender to continue to pursue collection.
The case could have been handled in less than two weeks in court, Fuller said. Unfortunately Banks had unknowingly agreed to an arbitration clause when she took out the loan.
At the time the court sided with Rapid Cash and sent the case into arbitration in late February.
Speaking out on behalf of payday loan borrowers through the American Association of Justice, a legal advocacy group, Banks went public with her story earlier this month.
It wasn’t until she told her story to the Oregonian that Rapid Cash acknowledged that there had been a mistake.
The $40,000 debt never actually existed, said the company. It was all due to a misplaced decimal point that caused the true amount Banks owed — $403.17 — to appear instead as $40,317.
“We had a system glitch that day that caused some incorrect letters to be sent out,” Melissa Soper, spokesperson for Rapid Cash, told Yahoo Finance.
Banks is now seeking monetary relief from the company as she still owes her original attorney hundreds of dollars in fees and will have to pay an additional $200 to cover the fee for arbitration.
“I just want the problem to go away,” Banks said. “All of this could have been eliminated if they just [admitted the error] earlier.”