Ark. AG says interest rates too high
LITTLE ROCK, Ark. (Legal Newsline) - Arkansas Attorney General Dustin McDaniel filed a consumer protection lawsuit on Monday against two companies and a Missouri man for allegedly offering loans at interest rates higher than 600 percent.
Josh Mitchem, Platinum B Services LLC and PDL Support LLC of Kansas City control the operations of six Internet payday loan websites. The websites allegedly purport to be based on the Caribbean island of Nevis. The extremely high interest rates allegedly charged by the lenders violate Arkansas law regardless of the defendants' location.
"The websites operated by these defendants offer loans that push consumers further and further into debt," McDaniel said. "These usurious practices are just as illegal when offered on the Internet as when they were offered from storefronts in Arkansas. We shut down lenders operating in Arkansas and will continue to take action against online payday lenders."
The defendants and the websites allegedly offered loans with interest rates and fees that far exceeded the amounts permitted by Arkansas law. One alleged contract disclosed an annual interest rate of 644.12 percent, while interest rates for other loans were also higher than 600 percent.
Mitchem, Platinum B Services and PDL Support allegedly control the websites, bank accounts, phone numbers and fax numbers that are used to make and collect on the loans. While the entities allegedly claim to be located in Nevis, all operations for lending are based in the Kansas City area. The lenders that are allegedly controlled by the defendants include The VIP Loan Shop, Red Leaf Lending, Paradise Cash Advance, Everest Cash Advance, Bottom Dollar Payday and Action Payday.
The lawsuit seeks restitution for consumers, civil penalties and an injunction to prohibit the defendants from offering or collecting upon illegal loans in the state.