Beebe Expands Lawsuit Against Jonesboro Payday Lenders

by Arkansas Business Staff  on Wednesday, Jun. 21, 2006 2:37 pm  

Beebe Expands Lawsuit Against Jonesboro Payday Lenders

Attorney General Mike Beebe said Wednesday that his office has added two more lenders to a lawsuit against Money In A Flash.net of Arkansas, a Jonesboro company that entered into contracts with consumers for Internet service that also included loans at what the AG's office calls "unconscionable and unlawful interest rates."

The lawsuit now aims to end lending at Money In A Flash.net operations in Little Rock and West Memphis, in addition to the Jonesboro location in the original filing.

Beebe also filed a separate lawsuit against MagnoliaMoney.net, a similar business in Magnolia. Four defendants in that lawsuit are also named in the lawsuit against Money In A Flash.net.

Beebe said that under the terms of contracts issued at all four outlets, consumers received on-the-spot loans of $100, $200 or $300 disguised as "rebates." He said that customers were then required to make monthly or biweekly payments to the lender in payments that translated into annual percentage rates of up to 520 percent.

"Dishonest operators continue trying to find ways around Arkansas law to take advantage of consumers through these illegal high-interest loans," Beebe said. "Some customers in this scheme ended up paying more than $1,500 after receiving a $300 'rebate' for Internet service that was, in most cases, non-existent."

The lawsuits also charge the companies with misrepresenting the contracts as agreements for Internet access when "the transactions are shams to disguise the high-interest loans." Beebe is seeking an injunction to stop the loans, restitution for consumers and civil penalties.

 

 

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