For Immediate Release
Media Contact: Bob Cooper
Date: July 29, 2011
Utah Payday Lender to Pay Restitution to Idaho Borrowers
(Boise) – Idaho consumers are eligible to receive restitution payments from a Utah payday lender that was not licensed and attempted to garnish wages without a court order, Attorney General Lawrence Wasden said today. Under terms of a legal settlement with Wasden’s office, Flobridge Group, LLC must pay refunds to borrowers who paid the Springfield, Utah, company after receiving collection notices, wage garnishment requests or court documents.
Last spring, the Idaho Department of Finance banned Flobridge Group from engaging in payday lending in Idaho because it never obtained a license from the department.
The Attorney General opened an investigation into the company, based on reports from consumers. The investigation revealed that when borrowers missed a payment, Flobridge Group repeatedly called, emailed, and texted borrowers and their employers, threatening legal actions that the company had no authority to take. Consumers also reported that the company contacted borrowers’ employers and told them that state law allowed Flobridge Group to garnish borrowers’ wages without a court order.
The Consumer Protection Act prohibits creditors from engaging in deceptive debt collection practices and, except in limited circumstances, a creditor must have a court order to garnish a debtor’s wages.
“My office is committed to holding creditors and collection agencies accountable when they violate consumer protection laws,” Wasden said. “While borrowers must pay their debts, that obligation does not authorize creditors to ignore the law or harass borrowers.”
The settlement agreement requires Flobridge Group to refund the money it collected from Idaho borrowers after the borrower or the borrower’s employer received:
Wasden encouraged Idahoans who believe they are eligible to receive restitution to file a complaint form with his office. Complaint forms must be submitted to the Attorney General before September 12, 2011.
For more details about the restitution process, eligibility requirements and how to file a complaint, please visit the Settlement Claims and Information section of our website, or by call the Consumer Protection Division at 208-334-2424.
In addition to paying restitution, Flobridge Group must:
The company is prohibited from lending in Idaho until it obtains a license from the Department of Finance and may not collect on outstanding loans made to Idaho borrowers while it was engaged in unlicensed lending activities. Flobridge Group also reimbursed the Attorney General $2,200 for his attorney’s fees and costs.
Payday loans, which can have interest rates over 1000%, can be dangerous for consumers. Without thoroughly understanding the repayment terms and the consequences of not repaying the debt promptly, the amount owed can quickly spiral out of control.
Free consumer education manuals regarding credit and debt issues, collection agencies, mortgage loan modifications and other financial matters are available on this website or by calling the Consumer Protection Division.
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