Nevada Online Payday Loans Companies Sued
Federal and state regulators in Nevada have gotten a court order that bars seven online payday loan companies from engaging in a few specific practices.
Federal Trade Commission claims the companies have used “deceptive” lending and collection practices.
Who is involved
The companies named in the lawsuit, which was filed November 2008, are: Leads Global Inc., Waterfront Investments Inc., ACH Cash Inc., HBS Services Inc., Lotus Leads Inc., First4Leads Inc., Rovinge International Inc.
The companies have agreed to obey the court order until the case goes to trial.
Accusations
The companies are accused of omitting loan terms from online payday loan applications. The suit also says the companies “used abusive and deceptive collection tactics.”
Here is a list of some other claims prosecutors are making:
“Falsely threatening consumers with arrest or imprisonment, falsely claiming that consumers are legally obligated to pay the debts, threatening to take legal action they cannot take, repeatedly calling consumers at work and using abusive and profane language; and disclosing consumers’ purported debts to co-workers, employers and other third parties.”
Not a fireable offense
The lawsuit does not seek to shut these companies down or take away their lending licenses. The prosecutors will seek to bar the companies from using the practices named in the future.
The court will also ask that the companies forfeit any money acquired using said practices.
One side of the story
A few payday lenders aren't welcome in Nevada anymore.
Until the trial, the companies named in the lawsuit cannot make loans from Nevada.
Regulators are also seeking to make it illegal for the companies to automatically withdraw fees from customers’ bank accounts. The news story printed in the Las Vegas Sun doesn’t contain any comments or responses from the online payday loan companies regarding the allegations.
I’ve never believed in the government being a nanny and cleaning up people’s messes for them, but if these lenders engaged in practices such as not disclosing terms and offside collections, then they may have had this coming. I’m not for excessive regulation, but there is a definite offside line.