Court orders Internet payday lenders to comply with McGraw's subpoenas
CHARLESTON -- Attorney General Darrell McGraw's office has been granted a petition to enforce investigative subpoenas against 10 Internet payday lenders.
Kanawha Circuit Judge Paul Zakaib orders the lenders to produce subpoenaed documents and enjoins them from making or collecting payday loans in the state until further order from the court.
Typically, payday loans are short-term loans or cash advances -- typically for 14 days -- that are secured by a post-dated check or, in the case of Internet loans, secured by the consumer's consent to an electronic debit for the full amount owed from a personal checking account.
According to McGraw's office, the AG's Consumer Protection Division opened an investigation in 2005 "after learning that numerous companies were sidestepping West Virginia usury laws by providing loans for consumers over the Internet."
The AG's office says some consumers were charged annual percentage rates ranging from 600 to 800 percent, more than 44 times greater than the maximum allowable rate of 18 percent APR for similar consumer loans in West Virginia.
McGraw's office has concluded settlement agreements with at least 17 Internet payday lenders. Most recently, the office entered into settlements with Magnum Cash Advance Inc. of Wilmington, Del.; Apple Fast Cash Personal Loans of Wilmington, Del.; and Payday OK d/b/a Payday Select of New Castle, Del. Collectively, these settlements netted $225,000 in refunds and cancelled debts for 1,654 West Virginia consumers.
The companies that were ordered by the court to comply with McGraw's investigative subpoena and to stop making or collecting Internet payday loans in West Virginia are:
* Ambassador Financial Services dba Nationwide Cash of Esponola, Minn.
* American Interweb Marketing dba CASHrebateonline.com of Carson City, Nev.
* Americash Hotline LLC dba Direct Cash Express of Wilmington, Del.
* Cash Advance Inc. of Carson City, Nev.
* Cash Advance USA of Miami, Fla.
* Cash Net of Salt Lake City, Utah
* GECC dba Cashdirectnow.com of Rapid City, S.D.
* Internet Cash Advance Marketing Inc. dba Cash Back Values of Carson City, Nev.
* QuikPayday.com Financial Solutions of Logan, Utah
* USA Cash Center of Rapid City, S.D.
"I commend the 17 companies that have cooperated with our office and agreed to refund fees and to stop making Internet payday loans in West Virginia," McGraw said in a statement. "As for the others, my office will continue to take whatever legal measures are necessary against them until all unlawful Internet payday lending in West Virginia has been halted."