Payday Loans Lawsuit Investigation
Berger & Montague, P.C. is investigating a potential class action lawsuit on behalf of anyone who has ever borrowed a payday loan, especially from MoneyMutual.
Which payday lenders are you investigating?
We are especially interested in hearing from people who have borrowed payday loans from the following lenders:
- Check ‘n Go
- Ace Cash Express
- Speedy Cash
- Advance America
- Cash Express
- Check Into Cash
- The Cash Store
- Rapid Cash
- Cash Max
- Money Mart
Are lawsuits against payday loan companies common?
Yes. In March 2015, payday loan firm MoneyMutual, which is backed by celebrity talk show host Montel Williams, paid $2.1 million to end an investigation by the New York Department of Financial Services into its supposed involvement in marketing illegal payday loans to the state’s consumers. MoneyMutual can no longer advertise its services to customers in New York, and Montel Williams can no longer endorse the company in the state.
In August 2016, the CFPB won a lawsuit against CashCall, Inc., a payday lender who engaged in deceptive practices by servicing and collecting on loans in certain states where the interest rate on the loan exceeded the state usury limit and/or where CashCall was not a licensed lender.
What is a payday loan?
A payday loan is a short-term, high-interest loan designed to bridge the gap between paychecks when you have an immediate need for funds. To secure a payday loan from a company, you provide certain personal and financial information, request a loan for a specific dollar amount (secured by a check or your bank account debit authorization), pay a fee for the loan, and receive the cash (or a deposit into your bank account).
Payday loans can be very costly. The loan amounts typically range from $50 to $1,000, depending on your state’s laws. The fees also depend on state law, but the structure is generally something along the lines of a $15 fee per $100 borrowed. Because these loans have such short terms, the cost of borrowing is usually very high. A typical payday loan with a two-week term and a $15 per $100 fee has an annual percentage rate (“APR”) of nearly 400%, according to the Consumer Financial Protection Bureau (“CFPB”).
Are payday loans regulated?
Yes. The federal Truth in Lending Act treats payday loans like other types of credit: the lenders must disclose the cost of the loan. Payday lenders must give you the finance charge and the APR in writing before you sign for the loan.
Additionally, numerous states have very specific laws that regulate the lending industry. Called usury laws, these regulations define permissible lending terms and rates. Some states also have laws that regulate the amount a payday lender can lend to consumers and how much they can charge for the loan. Other states have banned payday lending all together.
Payday lenders often work around regulations by partnering with banks based in other states. It is important to read the fine print on your payday loan offer and understand your consumer rights.
If you have ever borrowed a payday loan, especially from MoneyMutual or CashCall, contact Berger & Montague. We will review your state’s usury laws to ensure the payday loan company you used followed the proper regulations. If they did not, you may be able to file a class action lawsuit.
Do I have to pay to consult with an attorney?
We are happy to talk with you about your potential claims free of charge. If we decide to represent you in a lawsuit, we will enter into a written contingent fee agreement with you. A contingent fee agreement means we only get paid if we win, and that we will receive our fees from the amount paid by the Defendant in the case.
Please contact us to discuss the details of your case. You may: