West Virginia regulators obtained a court order Tuesday halting illegal loan collections in the state by two out-of-state companies.
According to West Virginia Attorney General Darrell McGraw's office, Kanawha (W.Va.) Circuit Judge James Stucky ordered the two agencies - Ezell Williams, based in Illinois, and Frontier Financial Group LLC, based in Nevada - to stop collection efforts in West Virginia.
Stucky further banned the agencies from collecting Internet payday loans, which are illegal in West Virginia.
McGraw's office said it had received complaints that both collection agencies were pursuing illegal Internet payday loans allegedly owed to Money & More, a violation of Money & More's April 17, 2009, agreement with the Attorney General's Office in which the company promised to cancel all debts allegedly owed by West Virginia consumers.
McGraw's office said its investigation also revealed that the companies were not licensed or bonded by the state's Tax Department to collect debts in West Virginia, as legally required.
The companies also were ordered to comply with investigative subpoenas issued by McGraw's office. Both agencies declined to appear at a recent hearing.
McGraw's office has entered into settlement agreements with 112 Internet payday lenders and their collection agencies since it began investigations in 2005. The settlements have resulted in an estimated $2.5 million in refunds and cancelled debts for nearly 8,000 West Virginia consumers, according to his office.
McGraw recent drew criticism for an online video his office produced that directed college students and recent graduates to the state's consumer protection hotline (
