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Case ID: 2506 | Credit / Debt | 11/17/2004
The parties have reached a tentative settlement in an Indiana class action against short-term loan provider E-Z Cash Systems, Inc. on behalf of all persons who took out a loan with the business and were forced to pay interest that was allegedly too high in violation of state and federal lending laws. The action seeks unspecified compensatory and punitive damages, and an order forcing the business to cease offering loans with usurious interest rates.
The action alleges that E-Z Cash makes loans at 547% interest, far above legal interest rates allowed by the federal Truth in Lending Act and the Indiana Consumer Fraud Act. Payday loans are short-term, very high interest rate loans. The loans are typically two weeks in duration and carry annual percentage rates of 100% to over 1800%. The lender generally obtains a post-dated check as a means of repayment. At the end of the two-week term, the customer has the option of continuing the loan for an additional period by paying the interest. The loans are typically rolled over on multiple occasions. Generally, companies which make payday loans do not advertise the annual percentage rates. Instead, they advertise that the loans cost, e.g., $15 per $100. The consumer does not see the annual percentage rate until he or she is presented with the money. These loans are generally made to consumers facing financial emergencies. Once a consumer obtains such a loan, they will often be unable to pay it off except from the proceeds of additional loans. Often, the loans force the borrowers into unnecessary bankruptcies. The settlement will not be effective until the court grants it final approval. The court has scheduled a hearing on the matter for August 28. 2003. At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Credit / Debt Cases of Interest A class action lawsuit has been filed on behalf of loan originators at Kansas based Bank of Blue Valley, Inc. The loan originators claim that they were supervised, treated, and controlled in the same manner as employees, and required to work hours far in excess of 40 per week. Notwithstanding this, the originators claim, they were paid as independent contractors on a commission basis and the amounts paid were far less than what would be required for employees, for straight pay and overtime, under federal labor laws. The loan originators seek back pay and other damages. A national class action has been filed against collection specialist French & Associates on behalf of all U.S. residents who have, since October 2002, received a collection letter from French & Associates containing certain allegedly misleading language. The debtors allege that this language is deceptive, misleading and unfair and, thus, violates the Federal Fair Debt Collection Practices Act. The debtors are seeking declaratory relief and statutory damages.
Merchants Decry American Express Company's Use of Market Power to Muscle Into the Credit Card Market A company that has a great deal of power in one market should not be able to legally use that power to leverage its way into other markets--this is the heart of many antitrust actions. A class action has been filed against American Express Company on behalf of merchants who accept the company's charge cards, alleging that American Express uses its market power unlawfully to force class members to accept its credit cards at excessive rates in violation of federal antitrust laws.
New York State Attorney General Eliot Spitzer filed a $250 million fraud suit against H&R Block Inc., accusing the nation's largest tax preparation service of fraudulently pushing clients to invest their tax refunds in retirement accounts that had high fees and low returns. The lawsuit is on behalf of customers who have opened the Express IRA accounts. Federal credit and banking laws prohibit credit providers from discriminating based on ethnicity, national origin, or race. A class action has been filed against Ford Motor Credit Company on behalf of African American customers who allege racial discrimination in connection with the company's financing plan in violation of the Equal Credit Opportunity Act. Ralph Brooks, Jr., a Philadelphia man man who was shot and disabled when he was six years old, filed a lawsuit against Wachovia Bank, charging that the bank charged "sweep fees" for funds held in mutual funds set up with donations at the time of the shooting. |
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