Payday Loans: Who Uses Them and Why
N.C. Attorney General Josh Stein has temporarily stopped a Florida-based financial services company from operating in North Carolina, accusing it in a lawsuit of charging 120% to 200% interest on illegal online loans.
A Superior Court judge granted Stein’s request for a temporary restraining order against Approved Financial, which the attorney general said is not licensed to operate in the state.
The lender contacts potential customers by email and phone, skirting state consumer laws by requiring borrowers to travel to South Carolina to pick up their money, a news release said.
“North Carolina drove out payday lenders so they couldn’t take advantage of hardworking North Carolinians,” Stein said in the release. “We won’t allow them to try to operate in our state again by sidestepping the law and using online channels.”
Approved Financial has loaned funds to more than 380 people statewide, the amounts ranging from $500 to $5,000. Loans from the company require borrowers to secure loans with the titles to their cars, which allows Approved Financial to repossess vehicles from customers with late payments.
The judge’s order stops Approved Financial from making or collecting loans for the next 35 days, the release said, during which time Stein’s office will seek a permanent injunction. Stein is also seeking refunds for borrowers and civil penalties against the company.
An attorney for the company did not immediately return an email seeking comment.