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Monday, May 16, 2016

CFPB Takes Action Against Payday Lender for Deceptive Practices

By ABIA Outside Counsel, McIntyre & Lemon, LLC

The CFPB is suing a check cashing and payday lending company for allegedly deceiving and trapping consumers.

According to a CFPB complaint, the Mississippi-based company offers check cashing services and payday loans at approximately 50 stores in Mississippi, Alabama, and Louisiana. The CFPB’s complaint names a second company, which offers check cashing and payday loans in at least one store in Pearl, Miss.

The complaint alleges that the company engaged in unfair, deceptive, and abusive practices when it tried to keep consumers from learning how much they would be charged to cash a check and used tactics to stop consumers from backing out of transactions. Specifically, the CFPB alleged that the company trained its employees to never disclose the fee for cashing a check. The company also either refused or made it impossible to reverse a check-cashing transaction once consumers did learn what the fee was for cashing a check.

The CFPB also alleged that the company made deceptive statements about the benefits of its high-cost payday loans and also failed to provide refunds after consumers made overpayments on their loans.

The lawsuit is filed in the United States District Court for the Southern District of Mississippi, no. 3:16cv356WHB-JCG.

Read CFPB Press Release, Complaint.