DENVER (Legal Newsline) - Colorado Attorney General John Suthers announced a settlement Tuesday with two companies that allegedly caused consumers to pay more in interest on their payday loans than was required.
EZPawn Colorado Inc. and EZMoney Colorado Inc. allegedly failed to refund a pro rata portion of the interest rate when consumers prepaid the loans in full before the loans reached maturity.
Suthers looked into the two businesses after his office's Uniform Consumer Credit Code Administrator alleged that EZPawn and EZMoney were improperly refunding the interest rate on prepaid loans. The administrator issued a report requiring the two companies to take corrective actions, including issuing consumer refunds.
EZPawn and EZMoney failed to comply and claimed the administrator's findings were a legal misinterpretation. The administrator responded by bringing disciplinary proceedings against EZPawn and EZMoney.
"By settling this dispute, EZPawn and EZMoney will refund consumers $400,000 for the excess interest they kept and pay a $24,000 penalty," Suthers said. "Consumers will be issued direct checks this month and the companies will then have 60 days to prove they have done so."
EZPawn and EZMoney must conduct a self-audit to determine the amount of refunds due to customers within 30 days of the settlement.