Loan Issues : Consumer Assistance Program : University of Vermont

University of Vermont

Consumer Hotline:  Toll Free In VT (800)649-2424 or (802) 656-3183



There are an increasing number of online loan schemes affecting Vermont consumers.  Many money lenders operate solely via the internet (or use spam email, pop-up ads, or text messages), offering “EZ cash” or “Quick access to cash, no credit check” or “No credit? No problem!”  Many of these offers are fraudulent; some purport to originate from Vermont.  While some fraudulent loan offers can appear to be legitimate, there are steps you can take to protect yourself.

First and foremost, try to avoid online loans altogether (if it sounds too good to be true, it usually is), and seek out other alternatives for money management, such as these tips.  The Federal Trade Commission offers helpful advice and alternatives.

Learn more about the Attorney General's response to illegal lending, including settlements, lawsuits, letters, and a detailed report including consumer tips (as of April 2014).

Beware of Online Loans!

There are hosts of online loan offers that purport to offer easy access to cash or credit, but are really scams. Be wary of any website that asks you for your:
  • Social Security number
  • Driver's license number
  • Bank account information

Stay Informed about Illegal Lending

Email the distribution list to get news and updates from the Attorney General's Office about illegal lending.

Illegal Lending Report Summary (April 2014)

Click here for relevant laws and Attorney General enforcement actions on illegal lending.

Debt Settlement Scams

Don't be fooled by phone calls offering to lower your credit card rates, settle your debts, or negotiate with your lenders. To learn more, visit the Federal Trade Commission website.

Is the lender licensed to do business in Vermont?

Unless it is a federally-regulated entity such as a bank or credit union, a lender operating in Vermont or lending to Vermont consumers must be licensed with the Vermont Department of Financial Regulation (DFR). You can check the licensure status of a lender online on the Department of Financial Regulation's website. You can also check online to see if a lender has already been identified as an "unlicensed lender" on the Department's Unlicensed Lender List.

If the lender is unlicensed, you may file a complaint with:

1)    The Department of Financial Regulation
  • Call (802) 828-3307 or email: [If emailing, for security reasons, please specify "Unlicensed Lender complaints" in the subject line.]

2)  The Attorney General's Office

Is there a fee you have to pay before you receive the loan funds?

A loan that requires a payment up front from you prior to disbursing funds is unlawful in Vermont. Do not pay any money up front for a loan. If a lender wants you to wire money or load cash onto a prepaid card prior to receiving your loan, cease contact with the lender and notify DFR, CAP, and/or the Attorney General's Office.

Is it a "payday" loan or an illegal loan?

"Payday loan" is a common term that generally means short term loans with very high interest rates that require electronic access to your bank account.  These loans are generally unlawful in Vermont, as their interest rates often exceed Vermont usury laws. Vermont limits the amount of fees and interest a lender may charge to 12-24% annually.  Many of these loans are also from unlicensed internet lenders (see above.) The instructions below are for anyone who has obtained a payday loan, or a loan from an unlicensed lender.

What you should do if you have a payday loan or loan from an unlicensed lender:

  • Cancel the loan, and cease all electronic payments immediately, by sending written notice to the lender stating that you revoke authorization for all automatic debits and electronic payments and requesting that all payments stop immediately. 
  • Here is a sample notice form to revoke your authorization and instructions on how to send it.
  • Provide a copy of the notice to your bank and request that all electronic payments to that lender be stopped by your bank.
    • Provide proof that you sent the notice (i.e. fax confirmation receipt, a copy of the "sent" email, etc.) to your bank.
    • Even if your lender has not responded to you, explain to your bank that you cancelled your authorization and that the bank should no longer allow any automatic debits from that lender.
    • If your bank is unwilling to stop automatic debits from your account, contact CAP and/or the Attorney General's Office.
  • Ask the lender for a “payout statement” or “alternative payout” (i.e. a way to pay off the loan).
  • If you have paid back all of the loan amount, you do not have to pay any more. If not, contact the Consumer Assistance Program to determine what your options are.
  • Collect as much information as you can from the lender (their place of business, their contact information, ask for all documents pertaining to your loan).
  • It is unlawful for the lender to harass you to collect the loan.  Visit our Debt Collection page for more information.
  • Contact us with questions or to file a complaint.
  • You may also file a complaint with the Department of Financial Regulation (see instructions above in answer to previous question).

I submitted an online loan application, how do I protect against identity theft?

If you wire transferred money in response to a loan offer, you should alert the wire transfer company immediately.  If you have submitted a loan application online, you should take immediate steps to protect yourself from possible identity theft.  For more information please visit our Identity Theft page.

Last modified March 04 2015 05:43 PM

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