Illegal Payday Loans

Little Rock, AR: (Dec-10-07) The state Attorney General Dustin McDaniel's office brought charges against nine businesses and individuals, including Dialing4Dollars.Net, JonesMoneyOnline.Net, CrossettCash.Net, ConwayCash.Net, Money.Net, ElDoradoOnline.Net and MoneyInAFlash.Net., alleging that they offered illegal payday loans disguised as instant cash rebates for Internet service. The suit claimed that customers were offered up to three Internet accounts and given a $100 rebate for each account, then required to pay $20 every two weeks for each account, or $120 a month for dial-up Internet access. Sources stated that dial-up Internet access costs $5 to $10 a month. McDaniel alleged that the deal was nothing more than a disguised payday lending scheme with interest rates exceeding 500%. As part of a settlement reached, the state reached a $1 million deal with the defendants. Under the deal, Arkansas customers will receive $800,000 in restitution and the remaining $200,000 will go to the consumer education enforcement fund in the attorney general's office. Additionally, the agreement also prohibits any type of debt collection efforts on any outstanding contracts and requires the businesses to close. The attorney general's office estimated the agreement would cancel about $4.5 million in outstanding balances on existing contracts. [NWA ONLINE] AG Reaches Settlement With Payday Lenders

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Published on Dec-12-07