Payday lender settles with Idaho AG

Bryan Cohen Jul. 20, 2011, 1:35pm


BOISE, Idaho (Legal Newsline) - Idaho Attorney General Lawrence Wasden announced on Tuesday that his office has reached a settlement with a Utah payday lender that will entitle Idaho borrowers to restitution.

Under terms of the settlement, Flobridge Group LLC must pay refunds to borrowers who paid the Springfield, Utah, company after receiving collection notices, court documents or wage garnishment requests.

Wasden alleges that the company repeatedly called, e-mailed and texted borrowers and their employers when borrowers missed a payment, threatening legal actions the company had no authority to take. In addition, he alleges that the company contracted borrowers' employers and told them that state law allowed Flobridge to garnish borrowers' wages without a court order.

The Consumer Protection Act prohibits creditors from engaging in deceptive collection practices and, except in limited circumstances, a creditor must have a court order to garnish the wages of a debtor.

"My office is committed to holding creditors and collection agencies accountable when they violate consumer protection laws," Wasden said. "While borrowers must pay their debts, that obligation does not authorize creditors to ignore the law or harass borrowers."

Flobridge is required to refund the money it collected from Idaho borrowers after the borrower or borrower's employer received a written collection notice, a summons, complaint, judgment, lien or other legal notice, or wage or bank account garnishment documents. In addition to paying restitution, the company must release all liens or judgments filed against Idaho consumers, stop all pending collection activities in Idaho, including third-party collection efforts, and rescind negative credit information from consumers' credit reports.

The company may not lend in Idaho until it obtains a license from the Department of Finance and may not collect on outstanding loans made to Idaho borrowers while it was engaged in unlicensed lending activities.

Flobridge also reimbursed Wasden's office $2,200 for attorney's fees and costs.

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