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Check ‘n Go borrowers eligible for $4.3 million in refunds

December 31, 2012

by Kevin L. Easton

San Francisco – A three-month outreach effort aimed at identifying and educating Check ‘n Go borrowers whose online installment loans at excessive interest rates may entitle them to significant repayments for interest, fees and finance charges launched Dec. 27 with a press announcement in San Francisco City Hall. The 90-day refund program, which will include events with consumer advocates and elected leaders throughout California, is among the terms of an agreement San Francisco City Attorney Dennis Herrera negotiated with the payday lender last June to settle litigation filed in 2007 by Herrera’s Consumer Protection Unit.

Check 'n Go, SFSan Francisco’s civil action alleged that the Cincinnati-based Check ‘n Go engaged in an illicit “rent-a-bank” scheme aimed at skirting California’s maximum allowable annual interest rate of no more than 36 percent for that type of loan. According to records obtained before and during the course of the litigation, Check ‘n Go made online installment loans to California consumers with interest rates as high as 400 percent – far in excess of what state law allows – as late as June 2008.

Though Check ‘n Go acknowledged no wrongdoing in agreeing to the settlement, the company agreed to commit $4.3 million toward restitution to borrowers who obtained online loans between November 2006 and June 2008. Refunds are expected to range from $20 to more than $4,600 for each eligible claimant.

“The strongest statement we can make against predatory lending in California is to maximize restitution for every borrower who deserves it,” said Herrera. “That’s why this outreach push for eligible Check ‘n Go borrowers is so important.”

A three-month outreach effort aimed at identifying and educating Check ‘n Go borrowers whose online installment loans at excessive interest rates may entitle them to significant repayments for interest, fees and finance charges launched Dec. 27 with a press announcement in San Francisco City Hall.

“We hope this outreach effort for Check ‘n Go borrowers matches the success we saw with Money Mart and Loan Mart earlier this year,” Herrera added. “Together, they should send a strong message to financial institutions about the need to adhere to lawful lending practices in California.”

A prior three-month outreach drive earlier this year targeting Money Mart and Loan Mart borrowers partnered with elected officials, consumer advocacy groups, community, faith and labor organizations statewide netted more than $5.5 million that is currently in the process of being paid to more than 8,100 eligible claimants. The average restitution payment obtained in the Money Mart-Loan Mart efforts was nearly $700.

Both the Check ‘n Go and Money Mart-Loan Mart efforts arose out of litigation that Herrera’s Consumer Protection Unit filed on April 26, 2007. That civil action named the payday lenders and an associated out-of-state bank, Wilmington, Del.-based First Bank of Delaware, for unlawful, unfair and fraudulent business practices stemming from short-term installment loans – typically marketed to low-income borrowers – at unlawful interest rates.

“The strongest statement we can make against predatory lending in California is to maximize restitution for every borrower who deserves it,” said Herrera. “That’s why this outreach push for eligible Check ‘n Go borrowers is so important.”

Check ‘n Go claimants may be qualified for restitution if they obtained a four-month installment loan online between November 2006 and June 2008 through the websites checkngo.com, ilp.fbdel.com and commandloans.com. To be eligible for repayment, borrowers must mail a claim form and a copy of the required form of identification to the settlement administrator, postmarked by March 28, 2013.

Herrera is urging potential claimants who think they may be qualified for restitution to visit, email or call for more information:

Kevin Easton, community relations coordinator for the San Francisco City Attorney’s Office, can be reached at Kevin.Easton@sfgov.org.

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