State AG Sues 17 Internet Payday Lenders and Collection Agencies
The West Virginia Attorney General announced that he has sued four collection agencies as part of an effort to crack down on illegal payday lending in his state.
West Virginia Attorney General Darrell McGraw’s Consumer Protection Division today filed two new suits as part of his continuing effort to halt the victimization of West Virginia consumers by Internet payday lenders and their collection agencies.
One of the suits names a series of interconnected corporations and individuals who jointly operated at least four websites making usurious payday loans to West Virginia consumers using the trade name "FFD Resources." McGraw’s suit alleges that the FFD Resources companies have refused to comply with his investigative subpoenas and have continued to collect their unlawful loans in violation of a court order entered in 2007.
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The FFD Resources Defendants include FFD Ventures, LP; DFD Ventures, LP; First Fidelity, Inc.; FFD Resources I, d/b/a Cash Supply; FFD Resources II, LLC, d/b/a Web Payday; FFD Resources III, LLC, d/b/a Payday Services; FFD Resources IV, LLC, d/b/a Payday Yes; FFD Resources IV, LLC, d/b/a Paper Check Payday; Great American Credit Management; Richard Clay; Jeanne Wint; Jaynes Hughes; and Ken Collom.
The second suit filed by McGraw’s office asks the court to order four collection agencies, Capital Collections, LLC, Claims Investigators of America, Crime Monitoring Center, and Premier Recovery Group, to comply with his investigative subpoenas and to stop collecting Internet payday loans in West Virginia.
Attorney General McGraw stated, "It is now more important than ever to stop modern day loan sharks from preying on West Virginia consumers who may be tempted by difficult financial circumstances to apply for payday loans on the Internet. While these companies offer quick and easy money, most consumers end up paying ten times the amount borrowed without ever paying off the loan."
The filing of these suits marks the latest actions taken by McGraw’s office as part of his continuing investigation of the Internet payday lending industry, which began in 2005. Since that time, McGraw’s office has made 97 settlement agreements with Internet payday lenders and their collection agencies, resulting in approximately $1.9 million in refunds and cancelled debts combined for 6,887 West Virginia consumers.
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Comments
Comment from paybill on November 18, 2009 at 11:18AM EST
so 6887 people got free money they don't have to pay back? I would call that legalized theft all made possible by an Attorney General. Amazing. What a great example he is setting.
Comment from rfink13 on November 18, 2009 at 11:47AM EST
How many of those 6887 people already paid more than the original principle? If a company engages in illegal activity then it should have all of its receivables cancelled.
Comment from me on November 18, 2009 at 11:53AM EST
Agreed, the companies are the victims here, these debtors knew what they were getting into!!
Comment from DONALD DALY on November 18, 2009 at 12:57PM EST
It would appear that chasing crooks gets more priority than stopping them before they open for business. How do these outfits get licensed? The governments (state and fed) would better serve consumers if they would simply make getting a business established more than simply paying a fee and then being turned loose. Then again, what would the A.G.'s do with their spare time?
Comment from Kaaper on November 18, 2009 at 3:12PM EST
You really don't know too much, do you, Rfink? I used to be the collection manager for a payday loan company. They are legal scams. Their real money is made by people who take out 3-4 of these loans from different companies and can NEVER pay it back, rolling it over and over, each time paying a hefty fee.
Comment from Anonymous on November 19, 2009 at 9:50AM EST
The customer is always right... well then. I think the customer did something illegal as well so they should be arrested. If I am speeding in my car and get caught its my fault, not the automaker for allowing the vehicle to go over the speed limit.
Comment from DAM75 on November 19, 2009 at 11:26AM EST
What happened to the word responsibility? This people understand agree to the terms of these payday loans. I think they should be hold accountable. What's next? AG's sewing gas stations for keep the cash register open to long? People might be tempted to steal it? How stupid have we all become? If a person goes into a bank and takes money with a gun its called stealing, but you go in and sign a piece of paper and later when you default on it the signer is the victim? If we took responsibility for our own actions none of this would be a problem. But I guess that is the real problem with America today.
Comment from Illlinois on November 23, 2009 at 11:18AM EST
Failure to answer a subpoena from a regulatory or similar agency will always lead to serious repercussions. Even more so, failure to comply with court orders is just madness.
Read the article again chums. In this case, the lenders and collection agencies, because of the aforementioned, are clearly in the wrong.
Comment from DAM75 on November 24, 2009 at 1:30PM EST
I have read it sir, but maybe you should read it again as well. Notice that the main issue here is that it's an online or web based service. In other words they have no physical shop in that state. I found this article that might help you out. http://www.usatoday.com/tech/news/2004-12-01-usurious-lending-online_x.htm. Is this a problem? I'm sure it is, however if you look at this again you will notice that the people are the ones going to this website and giving them their info. And when they can't pay they complain. Besides it's election time for most AG's anyways. Most elected officials don't do anything till its time for reelection.
Comment from Collections_Rule on November 28, 2009 at 4:53PM EST
It's not, when they can't pay they complain, it's when they can never FINISH paying that they complain. With payday loans the consumer is usually never informed of the APR until after the transaction is complete and they receive the T&C in the mail well after the fact.
Comment from DAM75 on December 3, 2009 at 1:03PM EST
Doesn't matter they still agreed to the terms of the loans. If people are that slow to know that payday loans come with a high interest rate then they should ask someone who can read it for them or who can explain it to them. If they pay it off in the time that was outlined for them then it's not a problem but, if they fail to pay that's when they all of a sudden become victim. People need to understand that if you FAIL to follow the directions then you will have to pay the price. The main problem here is that people need to blame them selves for this and none else. TAKE RESPONSIBILITY FOR YOUR OWN ACTIONS. We have become a nation of its not my fault its someone else. If you throw a ball and break a window who do you blame? The ball manufacture, the owner of the broken window, the person you was throwing it to, or the store that sold you the ball? Answer, NONE. Look into the mirror, that is the person you blame.