NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced settlements Monday with five companies that were collecting on payday loans from New York residents.
V&R Recovery Inc., doing business as Alexander & Stefano; RJA Capital Inc.; Westwood Asset Management LLC; Erie Mitigation Group LLC and Northern Resolution Group LLC allegedly collected payday loans at rates above the 16 percent interest rate set for most lenders not licensed by the state. Typical payday loans have annual interest rates from 100 percent to 650 percent or more.
"Payday loans trap thousands of New Yorkers in a cycle of debt and prey on vulnerable consumers, all for the financial benefit of debt collectors," Schneiderman said. "Unfortunately for those companies, payday loans are also illegal, and my office will continue to crack down on an industry that exploits desperate consumers across our state. These agreements are one more step in our continuing fight to protect New Yorkers from a range of unfair financial schemes - from predatory loans, to illegal foreclosures and other abuses by big financial institutions."
Under the terms of the settlement, the five companies will pay $279,605.98 in restitution and $29,605.98 in penalties. The companies will also be prohibited from collecting on payday loans from New York residents in the future.
One debt buying company was also required to reverse 8,550 negative credit reports it made to credit reporting bureaus on New Yorkers and is prohibited from collecting on $3.2 million in payday loans taken out by New Yorkers.