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Legal advice involving payday loan company?

Someone I know had an issue with a payday loan company. Here’s what I understand:

The consumer borrowed a loan from this online-based company. The consumer was misled about the fees, so a manager decided to waive all financing fees as a courtesy and allowed the consumer to pay ONLY what they borrowed. The consumer agreed, and the funds was withdrawn on a Friday (hence payday).

That following Monday the consumer checked their account and an additional unauthorized amount was debited from their account. The consumer contacted the company and was advised that it was an honest mistake on their end, that someone dropped the ball and forgot to adjust the remaining balance as part of the settlement.

As a result, the consumer had overdraft fees. Further, this damaged their reputation with their banking institution. They had perfect history with their bank for years. The payday loan company took this away in one day. Even more, there is the possibility that this may have damaged the consumer’s chances of pulling out a mortgage or auto loan with their bank.

However, the bank did offer an apology and resolution. They offered to refund the consumer for the overdraft fees, as well as provide them with an additional loan to cover the amount of the unauthorized debit- only this time the consumer would not have to pay this back (this was the quickest way to get the funds back in the account since the consumer had bills to pay). The consumer accepted.

Now, the unauthorized debit came out in 2 seperate withdrawals. One of the amounts was similar to an amount the payday loan company withdrew previously, which was for a “finance fee”. At this time the consumer disagreed with the amount of the finance charge that the payday loan company charge for each withdrawal, so they contacted the company to make amends and was told nothing could be done and that the funds will be withdrawn; so the consumer called their bank to put a stop payment on that transaction. The consumer did not know that the stop payment was still active for indefinite; so one of the 2 unauthorized transactions was reversed due to stop payment.

The consumer explained this to the company. They also explained to the company the damages they have caused them, their family, and their financial institution (mentioned earlier). They told the company how they felt- that it should be a “wash” because the damage they caused is worth far more than the amount they want paid back- which is a relatively small amount (less than $200).

The consumer does not want to pay the company anymore money and feel that they should not have to because of the damage they caused. The company is not willing to take any of the damaages into consideration and call it a “wash”. Instead, all they care about is getting paid this small amount.

With all this said, do you think the consumer should a) pay the small amount and nip it in the bud, or b) pay no more and seek a possible lawsuit against this company for the damages they caused?

Any help would be much appreciated.