Today, payday lender Quik Cash was forced to pay $170,000 in restitution by the Arizona Attorney General to “eligible consumers” that were victims of consumer fraud.
According to a news release, the attorney general filed a lawsuit against Quik Cash in December 2009 for reportedly obtaining as many defaults as possible against consumers who lived outside of Pima and Maricopa counties.
“Eligible Consumers” are those non-residents of Pima County who obtained pay day loans from Quik Cash outside of Pima County and against whom Defendants obtained a default judgment in the Pima County Justice Court and received funds from its collection efforts, including garnishments, which funds were applied to such default judgments.
“Quik Cash didn’t do anything illegal but stopped the practice more than a year ago”, a company spokesman said in a statement.
It sounds like not doing anything illegal is going to cost Quik Cash a few bucks.
With a market cap of over 64 million, Quik Cash can probably afford it.
The $40 billion a year payday loan industry is booming thanks to high unemployment and a lack of access to traditional bank credit.
While most individuals typically think about payday lenders doing business mainly with poor people and minorities, the Wall Street Journal reports that payday loans are also increasingly being used by middle class and wealthy Americans who’ve fallen on hard economic times.
But it doesn’t matter whether you’re earning $20,000 a year or $200,000.
If you’ve ever taken out a payday loan, you know they don’t come cheap. Annual interest rates of 400% or more are common, and that’s just one of the dangers of payday loans.