Payday Loan Lenders Forced to Make $1 Million Settlement Payment

Wed, 23 Sep 2009

A group of internet payday loan lenders has been forced to pay $1 million to settle charges from the US Federal Trade Commission and the state of Nevada. The companies were charged in November 2008 with using unfair and deceptive collection tactics.

The lenders told consumers that their loans had to be repaid by their next payday, with a fee of between $35 and $80, or the loans would be automatically extended and an extra fee debited from their bank accounts . There have been complaints from customers claiming to have been charged hundreds of dollars in late fees for a small loan .

Customers were falsely threatened with arrest and legal action, repeatedly contacted with abusive language, whilst details of their debts were also given to third parties without their consent. The companies also failed to provide consumers with the necessary written disclosures, including the amount financed, the interest rate and details of repayments.

Two of the settling defendants were individuals while the others were corporate. Aaron and Ivor Gershfield are the two offending individuals, while two of the payday lenders – Cash Today and The Heathmill Village – are registered in the UK, while another – Harris Holdings, is registered in Guernsey.
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