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Payday Lender in Trouble for Debt Collector Violations

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Fort Worth, TXA payday lender who was also involved in debt collection practices will pay $19 million in fines and refunds for issues with how the company collected debt and issued loans.

According to USA Today (11/20/13), Cash America International allegedly used a process called robo-signing to process documents used to collect debts. People who worked in the collections department reportedly stamped their manager’s signature on vital paperwork without the manager having actually reviewed the paperwork or documents that supported the paperwork. Officials noted that more than 14,000 consumers in Ohio were affected by the robo-signing. The company has begun repaying $6 million to those affected and will pay another $8 million in refunds.

According to the consent order, “[the defendant’s] debt collection acts or practices during the Relevant Period caused or were likely to cause substantial injury, including the filing of inaccurate affidavits and pleadings that could potentially cause consumers to pay incorrect debts or legal costs and court fees to defend against invalid or excessive claims.” The order also noted that reasonable consumers could have been misled by those actions into believing the information had been properly reviewed and executed.

Officials also found that active service military members were given loans with an interest rate above the 36 percent annual interest rate allowed by the Military Lending Act.

The practices of companies involved in debt collection have been at the forefront of the minds of many consumer advocates, as more information comes out that some companies harass, intimidate and mislead consumers into paying debts, in some cases debts that are not legitimate. Some states and consumer protection agencies are looking into changing the laws concerning debt collector harassment, hoping to better protect consumers from unethical practices.

Meanwhile, some consumers have taken matters into their own hands by filing lawsuits against companies they allege have harassed, threatened and intimidated them, violating federal and state laws while doing so.

According to The West Virginia Record (12/3/13), one woman in West Virginia has filed a lawsuit alleging a debt collector violated the Fair Debt Collections Practices Act and the Telephone Consumer Protection Act by using automated telephone dialing to call her at both her cell and residential phones. The lawsuit is in the US District Court for the Southern District of West Virginia, Case No. 6:13-20957.

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READER COMMENTS

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I am the comaker on an auto loan from Santander consumer financial and am being consistently harassed by robo calls from their collections dept asking for a commitment to make a past due payment. I have called and talked to two supervisors, (I have their names) and have had them enter notes in the collection file about the mentally challenged maker of this loan--a 29 year old single mother working in vegas as a stripper and potential model to eventually bring her daughter, who is in Sacramento with her parents attending parochial school, to vegas and make a life for both of them. She is so mentally challenged that she uses a GPS device on her lap to get her from point to point. At least 25 calls in the past 30 days, they don't identify themselves, do not leave a voice mail, and call from different phone numbers. When I have talked to a few of them, I ask them if they have reviewed the notes in the file and of course they have not. I ask them to review the notes and call the maker for a commitment on the payment. AND THEN THE NEXT COLLECTOR WHO HAS NOT REVIEWED THE NOTES++CALLS and calls and calls

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