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PayDay loan default in Texas-HELP ME


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Good Afternoon, my Dad received a call from a company called City Arbitrators (469-754-0987).  They were looking for me and told him that they are trying to locate me to serve me papers on a defaulted loan. I called them at the number that they gave me and was informed that I defaulted on a Payday loan in 2011 (this much is true, unfortunately). They said that it was thru Midland Financial, but I don't recognize the name. I asked for a # to contact the original creditor and the woman gave me a #, but said it was for the legal department. They are telling me that if the debt is not paid, they will be turning this over to file charges and have a judgement placed on me. I asked if they were a collection agency and they said no, they are just mediators. They said that the original balance being owed is $360.00 and that they will accept that as a settlement, otherwise, I have a balance of $861.00 including interest, but that amount will go much higher on a judgment. I am absolutely TERRIFED at this point. Does anyone have any advise or insight on this?

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ANY TIME that a debt collector calls you and tells you that you have to pay them or else you will have a judgment "placed" on you, it's a scam.  There is not a debt collector in the country that has the ability to "place a judgment" on someone.  That can only happen through the courts.  They also have already violated federal law in their actions.  Even if you had a payday loan in 2011, that does not mean that these guys are actually collecting on it, or that they have any legal right to do anything about it. 

First, when a debt collector has to serve papers on someone, they have in most cases already filed a lawsuit against that person.  Some states allow for service to be done before they actually file the complaint, but most do not.  If they have papers, then they would have most likely already filed a lawsuit against you.  Also, when they have papers to serve, they either call the sheriff's office or hire a process server and have you served.  They will not try to locate you so that they can settle first....if they have papers, they would want to serve those papers.  Many well known scams use this exact same deal that they told you. 

They violated the FDCPA when they told your dad that they were trying to find you so that they could serve papers on a defaulted debt.  They have ZERO right under the law to share that information with anyone unless you have given them permission to do so. 


I found this link where others were told the exact same stuff that you were, right down to the "Midland Financial" name.  It sure looks like a scam to me.  I would honestly not worry about these guys, but if you feel the need to do something, the next time you speak with them, the only thing I would ask for is an address so that you can send them written notice of dispute.  Generally when people ask for info like that, they just hang up on you.  Heres the link:



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    That is along the same lines as I had originally thought; however, they said that they were not a collection agency, but a "mediator". They did have the address that I used back in 2011, but failed to have an apartment number. I checked with my County Courts and there is absolutely nothing on file for me.  It was shady to me because the man that initially answered the phone hung up on me when I asked for the company name and mailing address. I called back and he said that he was blocking my number as harassment. Umm, you called me sooo.....Furthermore, I am pretty confident that the Statute of Limitations in Texas is 4 years from the date of last payment (oral, written or promissory). I'm pregnant and our 1 year old just got out of the hospital yesterday from RSV, so this stress is definitely NOT needed. Thank you so much for your reply, I greatly appreciate it!

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