EZCORP Inc. has responded to the $10.5 million settlement with the Consumer Financial Protection Bureau related to its payday lending and installment lending practices.

The CFPB alleges the Austin, Texas-based company engaged in illegal debt collection practices, violating the Electronic Fund Transfer Act, the Dodd-Frank Wall Street Reform and the Consumer Protection Act of 2010.

The company, under a CFPB investigation for two years, had self-reported many of the issues and years ago discontinued many of the practices questioned by the CFPB, the company stated.

EZCORP CEO Stuart Grimshaw said Wednesday: "Given our decision in July 2015 to exit all payday, installment and auto title lending activities in the United States, we believe it is in the interests of all stakeholders to bring this issue to an amicable close. Our focus will continue to be on responsibly and respectfully meeting our customers’ need for access to cash when they want it through our pawn business lines. We will also continue to enhance our policies, processes and procedures to improve our business performance and profitability.”EZCORP closed all payday, installment and auto title lending operations in the U.S. in July as part of a strategic move to focus on its core pawn brokering operations in the U.S. and Mexico and its Grupo Finmart business in Mexico, according to the company.

Without admitting or denying any of the facts or conclusions of law in the consent order, the company agreed to pay a total that included $3 million in civil money penalties and $7.5 million in customer redress and restitution.  

EZCORP also agreed to forgive all outstanding payday and installment debt, which had already been written off for financial purposes, either as bad debt or as part of discontinuing the U.S. financial services business.

EZCORP and its related entities, provided high-cost, short-term, unsecured loans, in 15 states from more than 500 storefronts, under the tradenames "EZMONEY Payday Loans," "EZ Loan Services," "EZ Payday Advance" and "EZPAWN Payday Loans."

The CFPB alleges that EZCORP engaged in unfair and deceptive debt collection practices in violation of the EFTA and Dodd-Frank. Specifically, the CFPB alleges that EZCORP:

  • made in-person visits to consumers’ homes and workplaces for the purpose of collecting debts, which visits disclosed or risked disclosing to third-parties the existence of consumers’ debts and caused or risked causing adverse employment consequences to those consumers;

  • communicated with third-parties about consumers’ debts, including calling consumers’ credit references, supervisors, and landlords;

  • deceived consumers with the threat of legal action, even though EZCORP did not refer consumers’ accounts to any law firm or legal department;

  • lied about not conducting credit checks on loan applications, but routinely ran credit checks on consumers;

  • required debt repayment by pre-authorized checking account withdrawals, even though by law consumer loans cannot be conditioned on pre-authorizing payment through electronic fund transfers; and

  • lied to consumers by stating they could not stop electronic withdrawals or collection calls or repay loans early.


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