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Arizona Accuses Payday Loan Company Of Deception

NOTE! QC Holdings is a payday loan company that is represented by 563 branches in 24 states, and lends almost $1.4 billion to its customers.

Arizona officials are opposing Quik Cash and its parent company, QC Holdings Inc. of Overland Park, Kan., in order to stop an unfair way of filing collections lawsuits. According to Arizona authorities Quik Cash violates Arizona laws by limiting their debtors' rights.

Tucson's Pima County Superior Court filed a lawsuit in which abovementioned cash till payday company is defendant.

First of all what laws require:

Arizona laws require that all small-claims lawsuits are to be filed in the area where a defendant (debtor that failed to pay back to the lender) availed a loan or resides.

Moreover, three years ago Quik Cash pledged to work in accordance with Arizona law, still filing a number of collections suits against nonresidents.

The state lawsuit says that the principle of filing such lawsuits is beneficial for Quik Cash, since it is difficult for debtors to contest the suit while living far from the court. The circumstances being so the payday loan company obtains wage garnishments and default judgments easily.

"The fact is that rural customers are in disadvantage, it is a hard burden for them," the suit said, "There was such a case: Quik Cash filed lawsuit in Pima County against Nevada customers who got their loan in Bullhead City, near Nevada border, 300 miles distance from Pima County"

Arizona Attorney General Terry Goddard (who initiated the lawsuit) speculates that the Quik Cash practices are nothing but the attempt to mock at Arizona judicial system.

Quik Cash representative Tom Linafelt, in his turn, said that the company is trying to adjust to Arizona's state law and that the company didn't violate the law on purpose. It wasn't but a misconception.

The lawsuit resulted in barring the company from filing lawsuits in the wrong courts or pressing cases already filed in the wrong courts. What is more, the lawsuit insist on forbidding QC Holding's operating in Arizona, ask to set aside all the lawsuits the payday company filed against Arizona cash until payday borrowers. $5 million in restitution is also an objective of the lawsuit.

Posted on Wed, 2010-01-06 05:52
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