A class action has been filed against numerous payday loan businesses, all of which are owned by Richard D. Clay, II, on behalf of all persons who entered into short-term loan transactions with the companies, alleging that the businesses violated the federal Racketeer Influenced Corrupt Organizations (RICO) and Truth in Lending Acts, and Georgia's civil and criminal usury statutes, when they charged the consumers excessive interest rates on the loans. The action seeks unspecified compensatory and treble punitive damages.

The action alleges that the companies charge customers 500% to 650% interest on short-term loans. The action further alleges that this business activity amounts to a conspiracy to unlawfully deprive consumers of money by charging these excessive amounts, and as such, implicates the RICO statute which authorizes triple punitive damages.

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.