Attorney General Kane files legal action over alleged illegal payday loan scheme

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Attorney General Kathleen G. Kane today announced a consumer protection lawsuit against a Texas-based company for allegedly crafting an illegal payday loan …

Attorney General Kathleen G. Kane today announced a consumer protection lawsuit against a Texas-based company for allegedly designing an illegal Internet payday loan program. According to the lawsuit, the defendants allegedly targeted consumers in Pennsylvania in violation of state law.

The civil lawsuit was filed in the Philadelphia County Court of Common Pleas against Think Finance Inc. (formerly ThinkCash), TC Loan Services LLC, Elevate Credit Inc., Financial U LLC and former CEO Kenneth E. Rees. Rees and the companies use an address of 4150 International Plaza, Suite 400, Fort Worth, Texas.

Payday loans, which typically charge interest rates of up to 200% or 300%, are illegal in Pennsylvania. According to the lawsuit, Think Finance targets consumers in Pennsylvania by using three Native American tribes, which function as the apparent lender, as cover. In turn, Think Finance derives significant income from various services that it charges to tribes.

According to the lawsuit, prior to establishing these tribal partnerships, the company allegedly used the cover of a rogue Center City Philadelphia-based bank, in what is commonly referred to as a “rent-a-bank” program, until when the federal government is shut down. the bank.

A press release from Think Finance in 2013 said the company had more than $ 500 million in revenue – up from $ 100 million in 2010 – and provided over $ 3.5 billion in loans to 1.5 million. consumers in the United States and around the world.

An internet marketer, Selling Source LLC, has also used its “MoneyMutual” website and television ads to generate online leads for high-rate lenders, including at least one tribal lender.

Selling Source reportedly referred Pennsylvania residents to the program for a commission, even after being ordered to stop those referrals in a 2011 agreement with the Pennsylvania Department of Banking. The lawsuit also includes various debt collectors as defendants, including Washington-based law firm Weinstein, Pinson and Riley PS, Cerastes LLC and National Credit Adjusters LLC, who are said to be used to collect debts derived from illegal loans.

Attorney General Kane explained that by operating and participating in the program, the defendants are charged with violating several laws in Pennsylvania, including the Unfair Trade Practices and Consumer Protection Act, the Corrupt Organizations Act and the Uniformity of Fair Credit Extension Act.

In the lawsuit, the Attorney General asks, among other things:

  • Injunction to prohibit defendants from violating Pennsylvania law;
  • Restitution for all consumers injured by the regime;
  • Civil penalties of up to $ 1,000 for each violation of Pennsylvania law;
  • Civil penalties of up to $ 3,000 for each offense involving a senior; and
  • Notification of credit bureaus to remove all negative information related to the scheme and all references to any of the defendants from consumer credit reports.

Attorney General Kane said the Bureau of Consumer Protection has already received information about numerous complaints against these companies, and she believes there are many more victims who have yet to file a complaint.

“All Pennsylvania residents with problems or complaints about payday loans or debt collection should contact us immediately,” Attorney General Kane said.

Consumers can call the Attorney General’s toll-free consumer protection line at 1-800-441-2555.

The lawsuit was submitted for filing in the Philadelphia County Common Pleas Court by Deputy Attorney General Saverio P. Mirarchi of the Attorney General’s Office of Consumer Protection. The Philadelphia law firm Langer Grogan & Diver PC assists him, as a special advisor.



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