News & Resources

Arizona settles suit with short term lender

Mar 13, 2011 Todd Milner

Short term lender Quik Cash recently settled a consumer fraud lawsuit with the Arizona attorney general, two years after the state litigator first filed allegations that the company's actions deprived consumers of their rights. The lender will have to pay up to $170,000 in restitution to eligible consumers who were victims of fraud. The allegations charged that Quik Cash filed for default judgments and garnishment orders in Pima County in order to obtain as many defaults as possible against non-residents of Pima and Maricopa counties. By doing so, the company did not give consumers a chance to appear in court or contest judgments and garnishments, according to the attorney general's office. In some cases, Quik Cash's actions allowed it to collect debts that consumers had already paid. Short term lenders have long been targeted by Arizona laws and are now illegal in the state, which can make it difficult for people with negative consumer credit reports to secure loans. Last August, lawmakers effectively banned the short-term financiers, but one state representative has proposed a new loan to allow higher interest rates, the Arizona Business Gazette reports. Representative Jim Weiers proposed the legislation and told the newspaper that the loss of short term lenders had left a short-term financing gap for consumers.