LOUISVILLE, Ky. (Legal Newsline) – On May 31, a cash advance company that provides loans in exchange for a portion of personal injury claim settlements was sued in a Kentucky state court over interest rates that the plaintiffs say are higher than what is permitted under Kentucky law.
The lawsuit was filed in Kentucky's Jefferson Circuit Court, Division Six against Oasis Legal Finance LLC and removed to the U.S. District Court for the Western District of Kentucky on June 12 by Oasis.
Nickesha McClain, as administrator for May King’s estate, and Cheston Mason sued Oasis Legal Finance LLC on behalf of themselves and others. The suit states both King and Mason borrowed $620 through a nonrecourse cash advance loan from Oasis in 2016.
Under the terms of the loan, the suit states Mason and King were required to pay back the amount plus interest with money they were expected to receive from personal injury lawsuits. King allegedly took out the loan in September 2016 and reached her settlement between January and February 2018. She is alleged to owe Oasis a total of $1,500.
Mason allegedly took out his loan in August 2016 and settled his personal injury case between September and October 2018. He is alleged to owe Oasis $2,015.
The suit states Oasis has “interest rates on the original loan principal that exceed the maximum allowable interest rate under Kentucky law,” according to the lawsuit. The interest rates for the loans exceeded the maximum annual rate of interest of 19 percent, the suit states.
The plaintiffs now seek a declaratory judgment that the subject contracts cannot be enforced and that Oasis is no longer owed any of the plaintiffs’ settlements.
“As a result of these violations, defendant has surrendered all rights to collect interest on this amount and must make payment of twice the amount of interest already collected from plaintiffs and the class,” the suit states.
The plaintiffs allege Oasis violated the Kentucky Consumer Protection Act when it allegedly misled them using deceptive acts or practices. They allege Oasis’ actions and conduct caused them to experience damages that range from economic loss to mental distress, inconvenience and shame.
The plaintiffs requested attorneys' fees. They also request the court will certify the class and name a class representative and appoint counsel.
The plaintiffs are represented by James Craig, Michele Henry and Tyler A. Larson of Craig Henry PLC in Louisville, Kentucky.
This isn’t the first time Oasis has faced a lawsuit over allegations of high interest rates. Legal Newsline previously reported that in Missouri last month, two plaintiffs alleged Oasis charged them more than a 100 percent annual percentage rate, but their loan documents did not detail what the annual percentage rate was. It has also fought cases in Georgia and Florida.
Oasis and LawCash were also ordered to pay $2 million to settle allegations of charging excessive interest rates for loans in Colorado.