Attorney General Darrell McGraw has asked a judge to block four Web sites from making payday loans to West Virginians over the Internet in a lawsuit filed Monday in Kanawha Circuit Court.
The suit seeks a temporary injunction against FFD Ventures, a limited partnership based in Nevada and Georgia, and a series of interrelated companies for allegedly ignoring investigative subpoenas from the Attorney General’s Office.
“While the majority of the [Internet payday lending] industry has now acknowledged that it will comply with West Virginia’s lending and usury laws, a segment of the industry, including the defendants herein, continues to violate its laws,” the suit states.
McGraw’s office began pursuing online payday lenders, who charge extremely high interest rates on short-term loans, in 2005. Since then, the attorney general’s office has entered almost 100 settlement agreements with payday lenders and their collection agencies, resulting in $1.9 million in refunds and canceled debts for 6,887 West Virginians, according to a news release.
“It is now more important than ever to stop modern-day loan sharks from preying on West Virginia consumers who may be tempted by difficult financial circumstances to apply for payday loans on the Internet,” McGraw said in a prepared statement.
“While these companies offer quick and easy money, most consumers end up paying 10 times the amount borrowed without ever paying off the loan.”
Under state law, it is illegal for a lender in West Virginia to charge more than 18 percent annual interest.
The suit claims the companies, which do business under such names as “Cash Supply,” “Web Payday,” “Payday Services,” “Payday Yes” and “Paper Check Payday,” have ignored an investigative subpoena from the Attorney General’s Office since 2007.
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