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Minnesota Attorney General Sues 5 Internet Payday Lenders for Automatically Extending Loans

posted by Nathalie Martin

The five lenders, Flobridge Group LLC, Silver Leaf Management and Upfront Payday, all of Utah; and Integrity Advance and Sure Advance LLC,  were each sued separately for violating Minnesota’s small loan laws.  The total U.S. market for Internet payday loans is estimated at $10.8 billion. These suits allege various violations, including automatic extensions of the loans and rolling the loans over by paying off an old loan with proceeds from a new one, as well as a failure to be licensed in the state.   The reporter who wrote this story  tried to call one lender and got a  voicemail system that kept looping back through the list of options after pressing "0" for "all other inquires." One of the options included pressing 3 "if you would like to extend your loan for another two weeks." A customer-service representative at Sure Advance LLC of Delaware asked for an inquiry to be sent to an email address. No response had arrived by late Tuesday.

Phone calls to one borrower, Diane Briseno's, home in Maplewood came from India, the Minnesota attorney general's office discovered. Her caller ID showed the call was from the State of Minnesota. Briseno's son, 20, had started applying for a loan online but never completed the form. Regardless, he had left enough information that the phone calls started almost immediately. When Briseno called back to a toll-free number, she was told her son had taken out a $700 loan and needed to pay $6,000 immediately.

September 7, 2011 at 12:38 PM in Payday & Title Lending, Underbanked/Fringe Banking

Comments

Shurtleff took $50,000 in campaign contributions from Johnson in 2008, while Johnson's company was under investigation by Shurtleff's own attorneys

Posted by: Chad | September 12, 2011 at 01:31 PM

This article demonstrates how careful consumers have to be when considering ways to pay their bills. Any type of payday or title loans are a bad idea,because of the high interest rates, potential for scams, and possible loss of your property. Not to mention, they can get one further into debt. Great article Nathalie!

Posted by: Monica Clark | September 24, 2011 at 01:29 PM

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