National Credit Adjusters LLC, a payday loan company recently targeted in a Pennsylvania enforcement action, agreed Monday to pay nearly $1 million in restitution to New York City residents and stop collecting debts in the city.
The company, in a settlement announced by New York City's Department of Consumer Affairs, will pay $962,800 in restitution to an estimated 4,663 New Yorkers. It's the highest amount of restitution ever secured by the department in a settlement. National Credit also will pay $350,000 in fines and agreed to a ban from applying for a collection agency license in the city for a minimum of six years.
The settlement follows an investigation by the Department of Consumer Affairs that ultimately charged the company with collecting payday loans illegally from New Yorkers. The company further was charged with deceptive practices, threatening to take legal action it was not allowed to take and engaging in unlicensed collection activities. National Credit Adjusters, as a result of the investigation, was charged with issuing short-term loans with interest rates higher than New York's 16% cap.
In November, Pennsylvania Attorney General Kathleen G. Kane's office filed a lawsuit for an illegal online payday loan scheme that named as defendants National Credit Adjusters, and several collection agencies including the Washington-based law firm of Weinstein, Pinson and Riley PS and Cerastes LLC.
Primary defendants in the Pennsylvania case included: Think Finance Inc., TC Loan Services LLC, Elevate Credit Inc., Financial U LLC and former CEO Kenneth E. Rees. The operation allegedly targeted consumers using three Native American tribes that functioned as the apparent lender, as a cover, according to the lawsuit. In turn, Think Finance earns significant revenues from various services it charges to the tribes.