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OFIS Commissioner Orders Payday Loan Companies to Stop Overcharging Consumers
FOR IMMEDIATE RELEASE
April 4, 2008
Contact: Jason Moon 517-335-1700
|LANSING- Today Office of Financial and Insurance Services (OFIS) Commissioner Ken Ross ordered the state's deferred presentment licensees-also known as payday lenders-to stop illegally overcharging their customers for returned checks. Under the Deferred Presentment Service Transaction s Act, companies can charge customers a maximum of $25 for a returned check due to insufficient funds. This means they can only collect the face amount of the check, a returned check charge of $25 and if there is a lawsuit, court costs. It has come to OFIS' attention that some companies are violating the act and are filing lawsuits against customers seeking to collect up to twice the amount of the face value of a returned check.
"Serious allegations have been made that some licensees are ignoring the law and we have initiated an investigation," said Ross. "If we find violations, our priorities will be to make consumers whole and take whatever steps are necessary as provided in law."
If the Commissioner finds that a company knowingly violated the Deferred Presentment Service Transaction s Act, he may order them to pay a civil fine of up to $50,000 for each violation , or revoke the deferred presentment license.
If Michigan consumers believe they have been a victim of this practice, they should contact OFIS toll-free at (877) 999-6442 or online at www.michigan.gov/difs.
Currently, OFIS regulates and has licensed nearly 800 Michigan deferred presentment companies. Access to licensee information may be found at http://www.dleg.state.mi.us/fis/ind_srch/ConsumerFinance/Search.asp
To view the Deferred Presentment Service Transaction s Act, visit:http://www.legislature.mi.gov/documents/mcl/pdf/mcl-act-244-of-2005.pdf