State regulators have fined a Reno-based payday lender a record $50,000 and ordered it to pay damages to a Michigan woman it allegedly charged $857 for a $200 loan she took out via the Internet.
Leads Global Inc. was fined for conducting unlicensed lending activity and multiple other violations, including harassing the Michigan woman at her home and place of employment, the Nevada Financial Institutions Division said in a statement Monday.
Regulators ordered Leads in March to halt operations in the state under any of the names it was doing business, including Cash Today, Cash Today Commercial, Cash Today Factoring, Global Cash Advances, Global Advances, Global Financial Services International Limited, Corporate Office Services.
A telephone recording at its headquarters on Terminal Way near the Reno-Tahoe International Airport answered "Cash Today" on Monday and referred calls to a customer service number, but a customer service representative hung up when The Associated Press called seeking comment from company officials.
Company representatives failed to appear before the state division during a disciplinary hearing on April 27, the state division said.
In addition to the fine, Leads Global was ordered to pay $1,054 in compensatory damages to Stacie Banks. The division, part of the Nevada Department of Business and Industry, identified her only as
a resident of Michigan who had secured the $200 loan.
Banks never was informed of the specific terms of the loan, including the annual percentage rate, a violation of state lending law, regulators said. She was subjected to weekly deductions of various "junk fees" from her bank account, though no deductions were taken toward her principal, the division said.
Banks ultimately paid Leads a total of $857 to close out the loan after enduring a pattern of harassment from Leads representatives at her home and work, the division said.
Steve Kondrup, acting commissioner of Nevada's Financial Institutions Division, said the division began an investigation earlier this year after receiving numerous complaints about the way Leads was conducting business.
All of the loans involved were deferred deposit loans, commonly known as "payday loans," and complaints concerning these loans were all from non-Nevada residents, he said.
"We will continue to aggressively pursue unlicensed activity in our state and will seek the maximum penalties to send a message to unscrupulous operators that they had better do business elsewhere," he said.
(Copyright 2007 by The Associated Press. All Rights Reserved.)