West Virginia Attorney General Sues 8 Payday Loan Companies

[Aug 19, 2010.]

 

Eight companies are being sued for offering illegal payday loans in West Virginia. The suit, which was filed by West Virginia Attorney General Darrell McGraw, asked the court to order the payday loan firms to surrender records of their West Virginia accounts. The suit also asks that the loan companies cease all lending in the state.

"When a company sets foot in West Virginia, whether in person or over the Internet, my office has a duty to ensure the enterprise complies with state law," McGraw said in a statement. "Any company that makes payday loans must halt its usurious business and produce records identifying its victims."

High-Interest Personal Loans

Payday loans come with exorbitant interest rates that can reach as high as 600% to 800% APR, trapping borrowers in a cycle of debt that is difficult to escape. The fast loans don't require credit checks and are made against a borrowers next paycheck. When a borrower can't pay off the balance, it gets rolled over into a new loan. According to Americans for Fairness in Lending, payday loans cost consumers over $4.2 billion in predatory fees each year and typical borrower of these quick loans pays back $793 for a $325 loan.

Illegal Payday Loans

Because many firms that provide payday loans can now advertise and recruit customers over the Internet, they can sign up borrowers all over the country. But West Virginia is among the 15 states where payday loans are illegal. The other states are Arkansas, Connecticut, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, and Vermont. Payday loans are also illegal in the District of Columbia, the Virgin Islands, and Puerto Rico.

The companies being sued by the West Virginia Attorney General are Payday Loan Resource Center LLC and Moe Tassoudi of Scottsdale, AZ; DirectROI d/b/a Cash West Payday Loans and Mike Brewster of Chandler, AZ; First American Credit; LoanPointe LLC, Joe E. Strom, Benjamin J. Lonsdale, James C. Endicott and Mark S. Lofgren of Highland, UT; Eastbrook LLC d/b/a Ecash and GeteCash of Provo, UT; National Title Loans d/b/a National Cash 12 of Elsmere, DE; Payday Financial LLC d/b/a www.LakotaCash.com and Martin Webb of Timber Lake, SD; and Payday Loans-ACH d/b/a www.ACHLoans.com of Emeryville, CA.

Residents of West Virginia can file a complaint with the Attorney General's office by calling 1-800-368-8808.

 

About Author:

Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.