Ten payday lenders, defined as a company that lends money at usually high interest rates against an upcoming paycheck, are facing Federal Trade Commission (FTC) charges regarding advertising and collection tactics.
The Nevada government added to the federal charges, which allege that payday lenders did not disclose important information about the loans and that their collection tactics were “abusive”. Potential customers were told that they could borrow several hundred dollars for a fee ranging from $35 to $80 provided that the amount was repaid in the next week. Borrowers had to provide the companies, some of them based in the United Kingdom, with their bank and social security information.
During repayment, special clauses that the government contends were not disclosed to borrowers would cause the loan amount to increase by many times over. If the borrower terminated the lender’s access to the account, they were subject to what the government called “abusive” collection tactics. Borrowers were allegedly told they were subject to arrest or property seizure.
he corporate defendants are Cash Today, Ltd., The Heathmill Village, Ltd., Leads Global, Inc., Waterfront Investments, Inc., ACH Cash, Inc., HBS Services, Inc., Lotus Leads, Inc., First4Leads, Inc., Rovinge International, Inc., and The Harris Holdings, Ltd., each also doing business as Cash Today, Route 66 Funding, Global Financial Services International, Ltd., Interim Cash, Ltd., and BIG-INT, Ltd. The individual defendants are Aaron Gershfield, Ivor Gershfield, and Jim Harris.
Tough economic times can sometimes cause consumers to seek alternative income or lending sources. As always, checking the lender’s reputation with your local consumer affairs office — at either the local or state level — is the best course of action before borrowing from any well-known lender.
Posted under Finance
This post was written by George Bounacos on November 13, 2008
