According to the suit, Direct Financial Solution of Utah has unlawfully charged Pennsylvania consumers interest rates in excess of 2000% APR and has violated the usury laws of the Commonwealth of Pennsylvania. The suit seeks to recover millions of dollars in illegal interest and to halt the allegedly unlawful loans.

Payday loans are short-term loans made to individuals who have poor credit and which require a deduction from the worker's paycheck for repayment. The Center for Responsible Lending estimates the industry costs Americans $4.2 billion a year by charging exorbitant fees.

These companies victimize those who live paycheck to paycheck and "they should be downright ashamed of themselves for putting working class families into desperate financial situations," said one of the attorneys representing plaintiffs.

The suit seeks to enjoin the lender from preying on the Pennsylvania working class and to recover millions of dollars in damages on behalf of all consumers who have been forced to pay excessive interest rates to what the handling attorney calls "cyber loan sharks" and "blood suckers."

The owners of Direct Financial Solution have been sued in many states and have agreed to repay millions to the thousands of customers who have paid interest on those loans.

Lenders Fight Back

With the federal government sitting out the battle, states have been trying to shut down or at least curtail payday lending, but the industry has been fighting back, flooding state legislatures with lobbyists.

The industry says it provides a service to low-income consumers with poor or no credit. Banks will not lend them money, industry backers say, so "cash advance" stores or payday lenders fill a critical need.

Critics counter that rather than providing a service, the payday lending industry is exploiting low-income consumers, trapping them in a spiral of debt. If a consumer borrows $100, a payday lender typically collects a fee of 15 percent, in this case $15.

That might not sound like much, but for a two-week loan, it amounts to an annual interest rate of 390 percent -- and is typically about what street-level mobsters charged for loans in the early 20th century before organized crime was "eliminated" and usurious lending was legalized.

The lawsuit seeks to represent individuals who used Payday Lender and paid exorbitant interest rates.