Dear Community Partners:
Please pass on this information to your constituencies, interested consumer protection organizations and individual consumers who may be owed a refund (up to $4,600.)
SAN FRANCISCO (Jan. 22, 2012)—A newly launched website aimed at identifying and educating borrowers of online loans from Check ’n Go launched today to facilitate claims from California consumers who may be eligible for potentially significant repayments in interest, fees and finance charges. The new website at http://www.caloanrefund.orgoffers access to downloadable claim forms and provides extensive information about the statewide refund program, which will conclude on March 28. The website also enables claimants and consumer activists to leverage the power of social media by sharing information with their online networks, as well as other ways to coordinate with more than 160 community partners involved in the effort so far.
The refund outreach program, which includes consumer advocates and elected leaders throughout California, is among the terms of an agreement San Francisco City Attorney Dennis Herrera negotiated with the Cincinnati-based Check ’n Go last June to settle litigation Herrera’s Consumer Protection Unit filed in 2007. San Francisco’s civil action alleged that 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 Nov. 2006 and June 2008. Refunds are expected to range from $20 to more than $4,600 for each eligible claimant.
“Because only online borrowers are eligible to receive these refunds from Check ’n Go, we need an aggressive online marketing push to spread the word,” said Herrera. “We’re doing our part with the website we’re launching today, but to make a real difference, we need everyone’s help to spread the word through social media. The strongest statement we can make against predatory lending in California is to maximize restitution for every borrower who deserves it. That’s why this outreach push for eligible Check ’n Go borrowers is so important, and it’s why we’re working so hard to make it a success.”
A prior three-month outreach drive last 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 for unlawful, unfair and fraudulent business practices stemming from short-term installment loans (typically marketed to low-income borrowers) at unlawful interest rates. In addition to Check ‘n Go and Money Mart/Loan Mart, the original lawsuit named Wilmington, Del.-based First Bank of Delaware as a defendant for aiding and abetting the predatory lending schemes. Herrera’s complaint alleged that Check ‘n Go offered installment loans of up to $1,500, with annual percentage rates exceeding 300 percent, through a questionable arrangement with First Bank of Delaware, in a deliberate effort to circumvent California’s interest rate limits.
Check ’n Go claimants may be qualified for restitution if they obtained a four-month installment loan online between Nov. 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:
www.caloanrefund.org CALoanRefund@sfgov.org (Toll Free) 1-855-581-2350
The litigation involving the Check ‘n Go loan settlement is: People of the State of California ex rel. Dennis Herrera v. Check N’ Go of California, Inc., et al. (San Francisco Superior Court Case No. CGC-07-462779).
KEVIN L. EASTON Coordinator, Community Relations
————————————————————- OFFICE OF CITY ATTORNEY DENNIS HERRERA San Francisco City Hall, Room 234 1 Dr. Carlton B. Goodlett Place San Francisco, California 94102-4682