payday loans  - Quik Cash Quik Cash, one of the nation's largest payday lenders with 550 locations across the country, has agreed to pay up to $170,000 in restitution to consumers who were victims of consumer fraud.

Under a settlement agreement, Quik Cash will pay restitution to consumers who had judgment for loans entered against them in the Pima County Justice Court even though they signed up for the loans outside of the county and didn't live there, Arizona Attorney General Tom Horne said in a statement. After obtaining the judgments, consumers were subject to collection efforts, including garnishment of wages, Horne said.Quik Cash's actions allegedly deprived consumers of their right to appear in court or to contest judgments and garnishments and in some cases, allowed Quik Cash to collect on debts consumers had already paid, he said.

The Attorney General's Office filed a lawsuit against Quik Cash, and its parent company Overland Park Kan.-based QC Holdings Inc., in December 2009 asking the court to set aside hundreds of deceptively-obtained court judgments, to stop the company from doing business in Arizona, and for up to $5 million in restitution

"The deceptive business and debt litigation practices alleged in the complaint are outrageous and make a mockery of Arizona's Justice Court system," former Attorney General Terry Goddard said in a statement issued in 2009. "The practices alleged in the complaint allowed the company to obtain a veritable assembly line of default judgments against borrowers who could not pay off their payday loans."

Tom Linafelt, spokesman for QC Holdings, sent the following statement on its settlement with the Arizona AG:

"For a period of time, local Quik Cash employees made the decision to file most of the small claims actions in Pima County. They did this even though some of their customers were not Pima County residents, nor did they conduct business in Pima County. Even though there is nothing legally wrong with this approach, Quik Cash stopped this practice over a year ago. Quik Cash has spent the past year working with the state on a reasonable resolution to any of the state's concerns over this ligation approach. Today marks the end of that collaborative effort, and Quik Cash will begin working with affected Arizona customers on possible refunds."

Payday loans are now illegal in Arizona. The law that authorized the loans was allowed to expire last year. Quik Cash operated in most Arizona counties. Arizona was the 17th state to ban payday loans.

Horne urges consumers to contact his office if they are aware of any continued payday lending activity.

Under the settlement, Quik Cash is required to pay up to $170,000 in restitution to affected consumers within 30 days. The company is to send a letter explaining that Quik Cash and the Attorney General's Office have entered into a settlement and that Quik Cash has released the consumer's default judgment and garnishment. A restitution check is to be enclosed.

Quik Cash also will pay $67,500 to the Attorney General's Office for attorney's fees and costs.

If you need a short-term loan, be wary. While they may be quick, you may have to pay an annual percentage rate of up to 500%. Some consumers extend their payday loans or visit other lenders to take out loans to pay off previous loans. For more information, see "BBB Tips on the ABCs of Short-Term Loans."

Increase your money and finance knowledge from home

How to Buy a Car

How to get the best deal and buy a car with confidence.

View Course »

Building Credit from Scratch

Start building credit...now.

View Course »

Add a Comment

*0 / 3000 Character Maximum