Payday Loan Lenders Get Hassled Over Disclosure-Again!

All industries have a few knuckle heads in their midst. No surprise, this includes the payday loan industry. There are some very basic requirements we in the industry must adhere to. Disclosure of loan terms, the APR (Annual Percentage Rate), the payment schedule, the amount financed, the total of payments, and any late fees are the very least.

Adherence to Fair Debt Collection Practices are another area that we must be aware of and adhere to.

So, along comes a few payday loan internet fools who fail to comply with these rules causing harm to our Industry when we don’t need it! These people, if guilty, simply blatantly ignored the rules and safeguards put in place for consumers at a time when we don’t need any additional heat!

Here’s the Press Release from the Nevada Office of the Attorney General:


Company is Also Known as Leads Global Inc. and Rovinge International, Inc.

Carson City, NV— Nevada Attorney General Catherine Cortez Masto announced today the State of Nevada and the Federal Trade Commission (FTC) have charged 10 related Internet payday lenders and their principals, based mainly in the United Kingdom, with violating federal and state law by not disclosing key loan terms to U.S. consumers and using abusive and deceptive collection tactics.
Leads Global, Inc. and Rovinge International, Inc. are Nevada corporations which maintain mail drops in Reno, Nevada to conceal the fact the real operation was located in the United Kingdom.
“Internet payday lenders must know that Nevada will not allow deceptive lending practices to exist in this State,” said Attorney General Catherine Cortez Masto. “These lenders will be charged and prosecuted.”

According to the complaint filed by the State of Nevada and the FTC, through websites such as www.cash2today4u.com, the defendants offered consumers loans of $500 or less within 24 hours without requiring a credit check, proof of income, or documentation. Consumers who applied for a loan on their website were required to submit an online application that asked for their bank account and Social Security numbers.

The complaint said Cash Today, Ltd. representatives called consumers who applied for loans through the website told them that they qualified for a loan which had to be
repaid by their next payday. Typically, the loan was in the amount of $200. Consumers were charged a loan fee ranging from $35 to $80. During the phone call, the Cash Today representative said the loan was not fully repaid by the required date, it would be extended automatically for an extra fee that would be debited from the consumer’s bank account “until the loan is repaid.” Consumers were required to provide the payday lender access to their bank accounts for payment of the fees.

The payday lenders did not disclose key loan terms in writing, such as annual percentage rate, the payment schedule, the amount financed, the total of payments,
and any late payment fees. The complaint states consumers who asked for written disclosures were told that the transaction was verbal only. Some consumers were told written disclosures would be sent to them after the phone call, but were never received.

After repaying the original loan amount, and sometimes hundreds of dollars in excess of the loan, many consumers terminated the lenders’ access to their bank accounts, often by closing the accounts. Once access to accounts was denied, consumers received abusive and deceptive collection calls by the payday lender aimed at regaining access to consumers’ bank accounts.

According to the complaint, Cash Today, Ltd. falsely claimed that consumers were legally obligated to repay the loans, even though the loans did not comply with payday lending laws in many consumers’ states and the defendants were not licensed to make consumer loans in those states. The defendants falsely threatened consumers with arrest, lawsuits, property seizure, or wage garnishment, and repeatedly called consumers, coworkers, and employers at their workplace, using abusive language and disclosing consumers’ purported debts.

The corporate defendants are: Cash Today, Ltd.; The Heathmill Village, Ltd.; Leads Global, Inc.; Waterfront Investments, Inc.; ACH Cash, Inc.; HBS Services, Inc.; Lotus Leads, Inc.; First4Leads, Inc.; Rovinge International, Inc.; and The Harris Holdings, Ltd.; each also doing business as Cash Today; Route 66 Funding; Global Financial Services International, Ltd.; Interim Cash, Ltd.; and BIG-INT, Ltd. The individual defendants are Aaron Gershfield, Ivor Gershfield, and Jim Harris.

The defendants are charged with violating the FTC Act by using unfair and deceptive collection tactics, including falsely threatening consumers with arrest or imprisonment, falsely claiming consumers are legally obligated to pay the debts, making false threats to take legal action that they cannot take, repeatedly calling consumers at work, using abusive and profane language, and disclosing consumers’ purported debts to coworkers, employers, and other third parties.

Cash Today, Ltd. has been charged with violating the Truth in Lending Act and Regulation Z by failing to make required written disclosures, clearly and conspicuously, before consummating a consumer credit transaction, including the amount financed, itemization of the amount financed, the finance charge, the annual percentage rate, the payment schedule, the total of payments, and any late payment fees. In addition, it is charged with violating Nevada’s Deceptive Trade Act by not disclosing loan terms, making false representations in collecting debts, and selling loans to consumers without licenses.

Again, these guys are fools (if guilty). The majority of their transgressions are basic ignorance of the minimum disclosure and collection procedures demanded of business today!

If you want to make certain you’re doing things correctly, learn here:
Payday Loan Industry.com

Comments ( 13 )
  • Heath says:

    This was one of the worst operators around. They are now called Meade Investments but used to be called Heathmill Village and they changed the name to try and hide the bad publicity about the payday loan business which they ran from Northway House.

    There were 5 campaigns. Route 66 Funding/BIG/ Cash Today/ Interim Cash/ GFSIL, but they were all part of the Heathmill group of companies run by Aaron Gershfield, Lorraine Coombes, Marc Surrey, Darren Webb, and Dan Craddock out of Northway House in London, England. For a $200 loan, you would by default, pay only a $80 “processing fee” every two weeks forever . . . UNLESS you called and authorised them to take the full $280 back on your first payday after taking out the loan. Of course, even if you DID call, the $80 would come out anyway.

    None of the “processing fees” went towards the repayment of the loan principal so many customers paid several $80 fees, sometimes totalling thousands of dollars, but still maintained the initial $200 loan balance so the “processing fees” would build up forever. And THAT is how they made money. Fortunately, the entire lending operation was shut down after an FTC lawsuit last year after Gershfield was forced to pay a $1m fine for violating lending laws. You can read all about it on the FTC’s website. If you pull the actual lawsuit and filings from the Nevada court (available online), you will see just how calculated this enterprise was. Everything was geared around making money and then not paying any tax on that money. At the time, there was a parallel criminal investigation conducted by the FBI but that was suspended pending the outcome of the civil suit with the FTC. Now that has been settled, the criminal probe will have resumed.

    They are now using the untaxed, hidden, income generated from the payday loan business to run new businesses in the UK under the names of Eyecare International and Bodycare International. These are mobile testing trailers which go around local businesses and perform health checks on staff, for a fee. Look out for these ventures if they ever come on the USA. They are not businesses I would personally deal with because I know the type of tactics these people use to collect money “owed” to them.

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  • Olechka-persik says:

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  • Clint Says says:

    I saw some of the sites the FTC complained about. I don’t know about the the quality of disclosure forms or the collection practices these lenders used (it sounds like those were pretty bad). However, the advertising aspect of the website should be troubling for anyone who sells a product or good on the Internet. The sites basically described what the customer was entering into.

    Other companies, industries, and individuals should be very concerned that the FTC has taken a strong arm approach to what it calls decepetive and unfair advertising practices.

  • http://www.PaydayLoanIndustry.com says:

    By “bad apples” I mean all industries have individuals that ignore basic good business practices. Failing to disclose APR’s, loan terms, copies of loan docs to consumers is simply a basic breakdown in appropriate business practices for the payday loan industry, mortgages, autos, and many, many others.

    I agree with your comments on consumers. It’s really the 80%-20% rule. Although perhaps in the payday loan industry it’s the 90%-10% rule.

  • Emily Winkle says:

    Hi, I’m Emily and I work with Check ‘n Go. One suggestion I have for people who are thinking about taking out a payday loan online is to make sure the company has physical store locations as well. This will only protect you. Check ‘n Go has physical stores and an online service to make it easier for what you would like to do. Visit http://www.checkngo.com for more information.

  • Payday Loans says:

    bad apples mike? the only reason payday lenders have such a bad name is because of those people who misused the service and got in deeper financial trouble. that is not the lenders fault! if you ask 90% of payday loan customers they will tell you how helpful the service is, and odds are the other 10% are those irresponsible ones, where it has nothing to do with the company, they are just looking for someone to blame.

  • Faxless Payday loans says:

    The industry, on the whole, has been very compliant when it comes to disclosure of all terms and responsibilities for loans. No industry is perfect but it is sad that this one receives closer scrutiny than the rest.

  • Mike says:

    All industries have bad apples! Too bad.

  • payday loan says:

    Payday loans are a loan choice that millions make. The freedom of choice is one that should never be taken away. When used wisely payday loans can help save money and get you through tight financial spots I know that if something unforeseen occurs, and in this day and age it occurs often, I can get the money I need in minutes and not stress out about how to make ends meet

  • Payday Loan says:

    I don’t know what the big deal is about getting a payday loan. I got one last year, paid it off in two weeks and the fees were less than if I had missed my credit card payment.

  • Payday Loan says:

    It’s just like any other form of borrowing. If you’re irresponsible, you’re going to be the one holding the short straw in the end. I don’t remember anyone petitioning against mortgage lenders when they were giving out $400K mortgages to people who couldn’t afford it.

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