Arkansas attorney general sues over payday loans stemming from Kansas City
James Dornbrook Reporter – Kansas City Business Journal
Arkansas Attorney General Dustin McDaniel filed a lawsuit Monday against a Missouri man whose companies control Internet payday loan websites.
The suit claims that defendant Josh Mitchem and his companies, PDL Support LLC and Platinum B Services LLC, control six websites that made payday loans in Arkansas at interest rates that violate its laws. The companies are “purported to be based in the Caribbean island of Nevis,” but lending operations are based in Kansas City, according to a release from McDaniel’s office.
“The websites operated by these defendants offer loans that push customers further and further into debt,” McDaniel said in a release. “These usurious practices are just as illegal when offered on the Internet as when they were offered from storefronts in Arkansas. We shut down lenders operating in Arkansas and will continue to take action against online payday lenders.”
McDaniel said the websites offer loans exceeding annual interest rates topping 600 percent, with one contract at 644.12 percent.
In a telephone interview, Mitchem said he and his companies are not payday lenders, so he thinks the lawsuit is targeting the wrong companies.
“All the websites are controlled by the lenders themselves,” Mitchem said. “We have no control over the development or issuing of loans.”
Mitchem said his companies only service the loans, so when he received correspondence from the Arkansas attorney general’s office, he referred them to the lending companies.
McDaniel thinks he is on target and said lenders known to be controlled by the defendant and his companies include: Action Payday, Bottom Dollar Payday, Everest Cash Advance, Paradise Cash Advance, Red Leaf Lending and The VIP Loan Shop.
The suit seeks an injunction to keep the businesses from offering or collecting payments on illegal loans made in Arkansas, along with restitution for customers and civil penalties.
James reports about banking, financial services, manufacturing and sports business.
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Article source: http://www.bizjournals.com/kansascity/news/2012/01/24/arkansas-attorney-general-sues-over.html
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