Retail and Online Payday Loan Lender Ordered to Pay Victims
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UPDATED: Sep 11, 2012
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An October deadline is fast approaching for California victims of Money Mart and Loan Mart’s abusive retail and online payday loan business practices to claim money.
In 2007, San Francisco City Attorney Dennis Herrera filed a consumer protection lawsuit against Money Mart and Loan Mart alleging the two companies committed fraudulent business practices that abused borrowers.
According to the lawsuit, Money Mart and Loan Mart marketed their short-term loans at exorbitant and illegal interest rates. A judge ordered that Money mart and Loan Mart pay customers up to $7.5 million.
The settlement requires the company to pay restitution to victims in amounts ranging from $20 to $1,800. Eligible claimants are those who borrowed retail or online payday loans from Money Mart and Loan Mart between 2005 and 2007.
Under the terms of the settlement Money Mart and Loan Mart must forgive a total of $8 million in retail and online payday loans that is owed by California borrowers.
The parent company of Money Mart and Loan Mart must also pay the City and County of San Francisco $875,000.
While Money Mart and Loan Mart are required to make “reasonable efforts” to locate eligible claimants, Herrera’s office is also authorized to continue efforts to locate victims before the October 1st deadline this year. Efforts have been ramped up in the three months before October to locate possible claimants that have moved or misunderstood letters informing them of the settlement.
“Bringing justice to victims of predatory payday lending means working aggressively to maximize restitution to all the low-income and moderate-income Californians who deserve it,” said Herrera in a news release from the Office of the City Attorney of San Francisco.
Herrera also made a point of giving attribution to other prominent officials working on behalf of the retail and online payday loan victims. “As we approach the final 60-days of our outreach effort, I’m very grateful to be joined by City Treasurer Jose Cisneros, whose leadership established more affordable alternatives to predatory storefront lenders. I’m also very thankful to labor and community leaders like Tim Paulson, Mike Casey and Michael Pappas who have also agreed to take part in our important task.”
Despite the settlement, Money Mart and Loan Mart still maintains offers online payday loans in addition to maintaining a number of retail stores across the country.
Borrowers who may be victims of Money Mart and Loan Mart can contact the San Francisco City Attorney’s office to complete a claim form.