Sign In | Create an Account | Welcome, . My Account | Logout | Subscribe | Submit News | Contact Us | Home RSS
 
 
 

Attorney general reclaimed money from payday lender

October 25, 2012
Weirton Daily Times

WELLSBURG -State Attorney General Darrell McGraw visited Brooke County Wednesday to pass out checks to a handful of area residents who were among 120 West Virginians he said lost thousands of dollars to an out-of-state payday lender.

Alissa Altomare of Weirton, Pamela Lee of Wheeling and Anna Morgan of New Martinsville were presented checks by McGraw at the Brooke County Courthouse.

McGraw didn't disclose the amounts collected for them but said a total of $135,000 paid by South Dakota-based Payday Financial will be disbursed to residents in various parts of the state.

Article Photos

MONEY RECLAIMED — West Virginia Attorney General Darrell McGraw stopped at the Brooke County Courthouse Wednesday to present checks to local residents who were among 120 West Virginians for whom McGraw’s office reclaimed money following a legal battle with an out-of-state payday lender business. With McGraw are, from left, Anna Morgan of New Martinsville, Alissa Altomare of Weirton, Pamela Lee of Wheeling and Amy Nickerson, Northern Panhandle consumer advocate for the attorney general’s office.

The settlement with Payday Financial also included $5,000 paid to the state, which he said will be used for general consumer protection and education.

McGraw said West Virginia law prohibits out-of-state payday lenders from doing business in the state. But he said the Payday Financial case was unique because its owner claimed the loans originated from the Cheyenne River Indian Reservation in South Dakota, where the company was based and were subject to tribal laws instead of laws in the states where the borrowers live.

Kanawha County Circuit Court Judge Louis Bloom ruled Payday Financial, which had been doing business as Lakota Cash, wasn't an Indian tribe and wasn't entitled to tribal immunity.

McGraw said the company's legal counsel said it would seek an appeal, but on the day before a contempt hearing for the case, the company submitted an agreement promising not to make loans in West Virginia and to distribute full refunds for fees charged to West Virginians.

McGraw said many payday lenders take advantage of financially struggling borrowers, "rolling over loans" when the borrowers come up short and applying increasing annual percentage rates, sometimes up to 600 percent.

"These debts can run away from them until they owe thousands of dollars on what may have been a $300 loan," he said.

Altomare said she was pleased but very surprised to receive the refund. She said when she received a call from the state attorney general's office, she initially thought it was a scam.

Asked how the attorney general's office was able to identify those entitled to refunds, McGraw said an investigative subpoena enabled his office to access records kept by Payday Financial.

He said cases against businesses also have arisen through complaints filed by residents through his office. He said residents may file a complaint against a business they believe is guilty of fraud or illegal business practices by calling his office's toll-free hotline at (800) 368-8808.

McGraw said his office has been vigilant in pursuing cases of consumer fraud, but those efforts aren't funded by taxpayers. He said the attorney general's office recruits lawyers from various parts of West Virginia as special assistant attorneys general to pursue them.

McGraw said the lawyers, who are chosen for their related expertise, receive nothing unless they are successful in prosecuting the cases. Then the attorney general's office petitions the court hearing the case to order the prosecuted business to pay legal fees to them, which normally are separate from the amounts awarded to victims.

 
 

EZToUse.com

I am looking for: