Cash Advance Lender Voluntarily Repays Customers
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UPDATED: Dec 14, 2012
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Cash America, an international cash advance lender, has announced it will reimburse 14,000 customers for improperly collected funds. These funds were collected from customers in Ohio since Jan. 1, 2008.
According to a press release from the company, several employees improperly prepared court documents that were used in legal proceedings in the state of Ohio. Even though the court documents were somewhat accurate, the manner in which they were filed was not in compliance with court rules.
“We hold ourselves to the highest ethical standards. When we discovered this problem, we took swift action. First and foremost, we will take care of our customers and we are implementing rigorous measures to do so. We will also institute additional steps to help prevent this problem from occurring again,” said Daniel R. Feehan, CEO of Cash America, in the press release.
As a result of its employees’ actions, Cash America intends to reimburse all amounts received through its collection activities that resulted from legal proceedings. These reimbursements will include interest on top of their original amounts. In order to avoid a repeat of improper paperwork filing, Cash America will be hiring an independent claims administrator in order to operate the reimbursement program, which will ensure that Ohio cash advance customers receive their proper amounts.
Additionally, Cash America intends to dismiss all outstanding lawsuits filed in Ohio since January 1, 2008, due to the filing errors caused by its employees. The cash advance lender is also going to terminate any and all existing collection activities for closed cases. Finally, Cash America will notify credit agencies that certain Ohio customers do not deserve damaged ratings as a result of judgments against them, which resulted from improper legal filings.
Even though Cash America is proactively aiding its affected customers in Ohio, the cash advance business could still be vulnerable to subsequent lawsuits or punitive reprimands from regulators.
Despite its past mistakes, Cash America intends to keep state and federal regulators informed of its reimbursement program. The cash advance company estimates that the reimbursement program, along with its related expenses, will cost $13.4 million before taxes. These costs will be included in its fourth quarter financial report, which will conclude at the end of the 2012 year.
“We are deeply committed to our customers, our shareholders and our 7,000 employees who work diligently to provide the highest level of service to our communities. We are taking these steps to demonstrate our commitment to corporate integrity and community responsibility,” said Feehan.