Fast Money Payday Lender Engaged in Deceptive Company Techniques Says AZ AG

Arizona Attorney General Terry Goddard filed case alleging business that is deceptive financial obligation litigation techniques against national payday loan provider Quik money (QC Holdings, Inc., and subsidiary QC Financial solutions, Inc.).

The lawsuit seeks as much as $5 million in restitution, asks the court to create apart a huge selection of deceptively acquired court judgments against Arizona cash advance borrowers and seeks to prevent the business from conducting business in Arizona.

The suit, filed in Pima County Superior Court, alleges that Quik Cash involved in a pattern of misleading company and commercial collection agency litigation techniques against a huge selection of Arizonans from throughout the state from 2007 through 2009. The Attorney General requested a short-term Restraining Order to avoid the payday lender from violating Arizona legislation by deceptively suing debtors in poor court venues.

“The misleading company and debt litigation methods alleged within the problem are crazy and also make a mockery of Arizona’s Justice Court system, ” Goddard said. “The methods alleged into the problem permitted the company to acquire a veritable set up line of default judgments against borrowers whom could maybe maybe not pay back their payday advances. ”

Quik money is just one of the biggest publicly exchanged payday lenders in the united states with 585 shops nationwide at the time of this past year

Quik money has about 38 areas in 12 Arizona counties. In 2008, QC Holdings reportedly originated some $1.35 billion in pay day loans and posted profits of around $180 million in pay day loan costs. In 2008, make money from its Arizona branches represented almost 8 % of their total profits.

The grievance alleges that from 2007 through 2009, Quik money entered into cash advance agreements with customers from over the continuing state, guaranteeing that the agreements could be governed by Arizona legislation. Nonetheless, the organization then involved with a extensive misleading training of suing a huge selection of Arizona pay day loan customers from outside of Pima County within the remote forum of Pima County Justice Court. These court filings had been definately not where in fact the customers lived or where in actuality the loans took place so-called breach of state legislation.

The grievance alleges that Quik Cash’s pattern of misleading litigation techniques benefited the ongoing business by reducing its expenses and rendering it prone to get default judgments against Arizona customers. After filing suit when you look at the wrong court and county, Quik Cash pursued standard judgments and wage garnishment actions in identical distant court place.

The suit further alleges that Quik money deceptively marketed and represented so it follows that is“mandatory criteria needing online payday loans Nebraska direct lenders lawful types of business collection agencies. The suit contends that Quik money started aggressive collection that is new to counter the company’s increasing losses and decreasing collections.

The suit states that a minumum of one Justice regarding the Peace in Pima County issued sales in lot of Quik money commercial collection agency situations informing the organization so it had sued into the wrong court and/or buying the business to register when you look at the county that is correct. Quik money also sued Nevada clients in Pima County, although the customers had acquired their pay day loans in Bullhead City, Ariz.

Arizona legislation calls for legal actions on tiny claims ($10,000 or less) become filed in Justice Court plus in the Justice Court precinct where in fact the defendant everyday lives or in which the deal happened.

The lawsuit especially alleges:

  • Quik Cash misrepresented to clients that its pay day loan agreements should be governed by Arizona legislation, whenever in reality the business knowingly violated Arizona law by filing commercial collection agency legal actions when you look at the wrong court location.
  • Quik Cash deceptively involved with “distant forum punishment” by improperly lawsuits that are filing Arizonans from throughout the state in Pima County Justice Court in breach of Arizona legislation, which escalates the debt obligations and causes it to be burdensome for customers to react, hence increasing the probability of acquiring standard judgments.
  • Quik money deceptively filed associated standard judgments and garnishment actions against customers in identical remote place after having deprived customers of the time in court during the outset associated with business collection agencies litigation.
  • Quik money deceptively promoted so it follows “mandatory” payday lender relationship criteria requiring collection that is lawful.

The suit asks the Pima County Superior Court to:

  • Prohibit the defendants from participating in misleading or false company methods and marketing from conducting business when you look at hawaii of Arizona.
  • Impose a penalty as much as $10,000 for every single breach for the Arizona customer Fraud Act, that could be up to $5 million in this situation.
  • Put aside the deceptively obtained default judgments against customers.
  • Need the defendants to reimburse the Attorney General for expenses of this research and attorneys that are reasonable charges.