Forster & Garbus, a Commack, N.Y.-based collection law firm, agreed Friday to settle charges that it illegally sued to collect on payday loans from New Yorkers.

The settlement with the New York attorney general's office bans Forster & Garbus from filing to collect against any resident of the state without obtaining a copy of the loan document to determine if it's a payday loan. The highest legal interest rate in New York is 16% for most lenders not licensed by the state, making most payday loans illegal, according to the attorney general's office.

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