NEW YORK ( MainStreet) — Payday debtors can now turn to the Consumer Financial Protection Bureau (CFPB) with complaints about unexpected fees and other issues.

"This development is very important because it modernizes outdated laws that no longer reflect current culture, technology, how people communicate and how people prefer to be communicated with," said Mark Schiffman, spokesperson with ACA International, a trade group for the consumer debt collection industry.

Payday loans are typically cash advances or check loans of $500 or less and are often touted often as a quick fix for consumers looking to bridge a cash flow shortage between paychecks or the receipt of other income. Although payday lenders in storefront locations have emerged across the country over the past 20 years, many are now offering payday loans online.

"Before the Consumer Bureau, borrowers who had trouble with payday lending products had few places to turn," said CFPB Director Richard Cordray. "By accepting complaints about payday loans, we will be giving people a greater voice in this market."

It was the passage of the Dodd-Frank bill in Congress that created the CFPB, which has the power to establish rules governing financial and non-financial organizations.

The CFPB began its supervision of payday lenders in January 2012 and also accepts complaints about credit cards, mortgages, bank accounts, private student loans, consumer loans, credit reporting, debt collection and money transfers.

"The opportunity to complain will help consumers who use pay day loans should those loans be sent to a third-party collection agency by the payday lender for recovery," said Schiffman told MainStreet. "However, these rules won't specifically cover the payday lending industry or its practices."

Payday complaints the CFPB will accept include unauthorized or incorrect charges to their bank account, payments not being credited to their loan, problems contacting the lender, unexpected interest, receiving a loan they did not apply for and not receiving money after they applied for a loan.

To submit a complaint:

  • 1. Go online at www.consumerfinance.gov/complaint
  • 2. Call the toll-free phone number at 1-855-411-CFPB (2372) or TTY/TDD phone number at 1-855-729-CFPB (2372)
  • 3. Fax the CFPB at 1-855-237-2392
  • 4. Mail a letter to: Consumer Financial Protection Bureau, P.O. Box 4503, Iowa City, Iowa 52244
  • 5. Get answers to questions about payday loans at consumerfinance.gov/askcfpb or by calling 1-855-411-CFPB (2372).

After submitting a complaint, borrowers are given a tracking number and can follow up on the status of their complaint by logging on to the CFPB website. The Bureau requests that lenders respond to consumer complaints within 15 days with a description of the steps they have taken or plan to take. Complaints are expected to close within 60 days.

"Our industry supports modernization and encourages balance between consumer protections and the ability to collect a rightfully owed consumer debt," said Schiffman. "The last thing we'd want are rules that make it difficult or impossible to recover a rightfully owed consumer debt, which is critically important to America's credit-based economy. "