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McGraw files proceedings against lenders

By John O'Brien | Sep 6, 2007


CHARLESTON, W. Va. - West Virginia Attorney General Darrell McGraw is getting tired of Internet payday lenders not listening to him.

Wednesday, McGraw sued 17 online lenders for allegedly not complying with his investigative subpoenas, then added contempt of court charges against 10 more that he says have not responded to the Kanawha Circuit Court's orders to do so.

Payday loans are short-term loans, typically for 14 days, that are secured by a post-dated check or by an agreement authorizing an electronic debit for the full loan amount, plus fees, from the consumer's account. They are illegal in West Virginia.

"Our Legislature has outlawed payday loans in West Virginia in order to protect our citizens from falling victim to modern day loan sharks. Nonetheless, these companies have sought to evade West Virginia law by making usurious payday loans to consumers in their homes over the Internet via interactive web sites," McGraw said.

"Today, my office has taken steps in enforcing West Virginia laws against companies that believe they are above the law simply because they operate over the Internet."

Since late 2005, McGraw has been investigating payday lenders who conduct business online. So far, 28 Internet payday lenders have signed settlements that require them to stop collecting payday loans while providing a total of $814,465.11 in canceled debt and refunds for 2,253 consumers.

On Feb. 5, Kanawha Circuit Judge Paul Zakaib told 10 lenders to comply with McGraw's subpoenas, though the Attorney General says they have not done it. Now he's asking that the companies be held in contempt and fined up to $5,000 a day until compliance.

Those companies are: Cash Advance Network, Inc. of Carson City, Nev.; Cash Advance USA of Miami; Cash Advance Marketing, Inc. d/b/a Cash Back Values of Carson City; Cash Net of Salt Lake City; Leads Global d/b/a Cash Today Limited of Reno, Nev.; of Reno; GECC d/b/a of Rapid City, S.D.; Americash Hotline, LLC d/b/a Direct Cash Express, LLC of Wilmington, Del.; Ambassador Financial Services d/b/a Nationwide Cash of Espanola, Minn.; Quik Financial Solutions of Logan, Utah; and USA Cash Center of Rapid City, S.D.

Seventeen others are apparently on the same track, as McGraw has initiated court proceedings against them. They are: AeroAdvance Financial, Inc. of San Jose, Cal.; Cash Supply of Espanola, N.M.; Eastside of West Orange, N.J.; FTR Processing of Shawnee Mission, Kan.; Geneva-Roth of Kansas City; Interim of New York; Miami Nation Enterprises d/b/a Ameriloan, d/b/a Cash Advance, d/b/a US Fast Cash, d/b/a United Cash Loan of Miami, Okla. and Carson City; MTE Financial Services d/b/a 500 Fast Cash, d/b/a, d/b/a, d/b/a, d/b/a Rio Resources, d/b/a of Miami, Okla. and Albuquerque; My Cash Now of West Vancouver, British Columbia and Chattanooga, Tenn.; Payday of West Vancouver, British Columbia; Payday of Columbus, Tenn.; Payday of Wilmington; Preferred Cash of Carson City; Route 66 Funding of Albany, N.Y.; Selling Source d/b/a Preferred Cash of Las Vegas; SFS, Inc. d/b/a One Click Cash of Niobrara, Neb. and Carson City; and Web Payday of Salt Lake City.

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