Payday Loan company pays big
A payday loan company in Washington is paying a hefty price after customers filed a class-action lawsuit against the company for harassment.
The company settled the lawsuit out of court, which means they do not admit to any wrongdoing on their part. However, the company must fork over a total of $2.5 million to be split among 10,701 plaintiffs.
Allegations
Pacific Financial Holdings Inc. is based in Federal Way, Washington, and owns Loan Ex. According to The Spokesman-Review newspaper in nearby Spokane, Misty Schleve accused Loan Ex of making harassing phone calls after she was late repaying $200 for a payday loan.
According to Schleve, she got a barrage of phone calls from the company in which they accused her of being a thief and used profanity. She says they also contacted her relatives regarding her debt.
Settlement
The terms of the settlement dictate that the company must pay all customers who may have been subjected to similar treatment. This amounts to every customer who defaulted on payday loans between Aug. 18, 2001, and Aug. 18, 2005.
The suit was filed in 2005, and a county judge approved the settlement this month, on Feb. 18. The company has until May 1 to notify all eligible recipients in the suit.
Negotiation
Pacific Financial and its subsidiaries admit no guilt.
Regarding the settlement that was reached, Seattle attorney Stephania Denton simply says the court-approved settlement “was negotiated among all the parties.”
Denton declined to elaborate.
Case closed
After the suit was certified as a class action, the company appealed to the Washington Supreme Court, which would not hear the case. The case was sent back to the county court, and the company agreed to the settlement.
The case didn’t make it to federal court because “an arbitration clause in the payday loan agreement could have trumped a class-action lawsuit,” according to the Spokesman-Review.
First of all, I am all for payday loans. They are a very useful financial resource and have helped many people amidst their desperate need of emergency funds. However, I will not endorse harassment. The company should not have gone about it the way they did. I used to be a loan consultant and that is NOT how we treat our customers. And to use profanity!? They were absolutely out of line, whether the client owed money or not.
Harassing payday loan and car title loan consumers is unforgivable! The payday loan industry gets enough “heat” with out “bad players” hurting the payday loan industry even more!
Hopefully, payday loan companies who fail to treat their clients well be driven out of business!
This sort of punishment will be a lesson for all the payday loan lenders.Even if they are not expected to be as much benevolent they should learn to coax the customer to repay the debt. That is the moral they should learn.
I don’t think that people should be derelict in repaying their obligations, but at the same time, there isn’t any excuse for engaging in offside behavior. It’s unprofessional – you can’t treat your customers that way. (Granted, when I worked fast food I would have loved to!) It’s more or less fair for them to have to forgive the debts of those that were harassed.
It is Never acceptable to use profanity, no matter what the circumstance.
As I am an affiliate marketer and I’ve worked in a company that specialized in lawsuit loans, I know the attrocities perpetrated by payday loan companies. I’m glad the 10k+ defendants are getting some compensation for the troubles.
they are still doing it! yelling and saying bad things as of 3 -31 -09
Does anyone know when the defendants will receive their money?
Stories like this give payday loans and lenders such a bad name. It’s good that these bad guys are found out then the industry can then carry on with the good guys running it.
Payday Loans in Uk are getting really popular in Uk now but the consumers are really happy with the service they get by payday loan providers. But some companies even in Uk seem to over charge than what they claim, so people should be real careful before they apply for a payday loan and complain to local authorities to take action about that company.