By Kenneth Long on April 28, 2011

West Virginia Attorney General Darrell McGraw is going after two more predatory lenders that may be in violation of state law. Title loan companies Fast Auto Loans and Community Loans of America have been sued for failing to turn over records requested from subpoenas.

While the companies did not provide so-called brick and mortar or storefront services in West Virginia, McGraw claims that West Virginia residents were lured into Virginia to obtain title loans. Any loan with usurious interest rates is illegal in West Virginia regardless of whether collateral is involved or not.

Interest rates charged by both companies were often as high as 300% and included a claim to the borrower's vehicle as collateral for the loan. The transactions themselves were not in violation of West Virginia law because the borrowers crossed state lines to initiate the loans. However, once the lenders began collection attempts and illegally repossessed vehicles from West Virginia property, they became targets of the state's top consumer protection watchdog.

McGraw's office fielded numerous complaints that, if confirmed, could trigger charges related to violations of West Virginia law as well as the federal Fair Debt Collection Practices Act (FDCPA). Complaints include allegations of harrassment and illegally revealing details of the debts to third parties including family, neighbors and employers.

Darrell McGraw released the following statement:


The attorney general went on to say that Fast Auto Loans adamantly refuses to comply with the subpoena. They claim that since they have not provided payday loans in West Virginia since 2009, that they do not have to comply. However we at Debtors Unite know that Darrell McGraw carries a pretty big stick, and you don't want to end up on the wrong side of the law when he has you in his sights.

Fast Auto Loans Inc. is a title loan company located in Virginia. Community Loans of America is based in Georgia but has other locations. CEO Robert I. Reich is president of both companies.

By Kenneth Long on April 27, 2011

Robert M. Lindsey and his companies were slapped with a $13.8 million fine by a Texas jury for engaging in fraud. Lindsey owns Jubilee Financial Management LLC, The Credit Card Solution and the Freedom from Debt Alliance. Texas Attorney General Greg Abbott announced the decision which supported the conclusion of his own investigation.

The firms falsely told customers that by allowing them to file lawsuits on their behalf, it would allow customers' debts to be erased. Additionally, they were led to believe that thousands of dollars in damages would be awarded from debt collectors, payable to the clients. They painted a picture of a win-win solution in which the client might recoup the money they paid in fees while getting their debts erased.

The reality of the situation was that while customers were paying an average of $3,000 in fees, the firm was doing little more than autogenerating form letters on their behalf. Imagine taking a stock document, inserting a customer's name and the information for their creditor, and then charging thousands of dollars for your "efforts."

Customers were left in far worse shape than when they first signed with Lindsey's companies. Their credit was ruined, they faced judgments on their own without representation and were out the 3,000 bucks they sent to Lindsey for "debt invalidation" services.

Lindsey violated the Texas Business Opportunity Act by using customers to solicit new business. He never registered with the Secretary of State as a multi-level marketer, nor did he obtain the required surety bonds.

Lindsey and his companies were also found to be in violation of the Texas Deceptive Trade Practices Act and the Texas Credit Services Act. While his firms may have generated roughly $2 million in revenues in the scam, the jury has found him liable for $13.8 million in fines. As is the case in most large judgments, little if any of the fines will likely be recovered, leaving the 700 victims of Lindey with little hope of obtaining any of their money back. Abbott's office will seize any assets that can be used towards refunds. Contact the Office of the Attorney General at 1-800-252-8011 for information on possible refunds.

The moral of the story is that as a struggling debtor, you cannot let yourself fall prey to deceptive schemes that attempt to rob you of your last dollars. Indeed, such last dollar scams never pay off. Instead they leave you broke, with damaged credit and all alone as you face legal action on your own.

Instead of buying into sensational stories about someone finding an easy way out of your debt situation, take a moment to check out their reputation. Not all companies have a stellar reputation. If you are in debt, you may need to take a close look at your habits and get help from a credit counselor. They will show you all of the options available to you, including repayment strategies, a debt management program, do-it-yourself debt settlement or bankruptcy. Then you need to make a decision based on what is best for you and your familiy. These companies may have been shut out of Texas, but there are many more who are ready and willing to take your money.

By Kenneth Long on April 26, 2011

Montana borrowers can finally breathe easy when it comes to short-term unsecured loans. Gone are the days of 400% interest rates on payday loans. Montana voters chose to cap interest rates on loans at 36% APR in November 2010. As a result of I-164, most payday lenders have chosen to cut back on lending or stop providing new loans altogether.

Since many families with bad credit still need some form of emergency credit, the SAFE line of credit of $500 is now available. With an interest rate of only 18%, it provides a more responsible loan option for borrowers that might have previously taken out predatory payday loans. Monthly payments of just $50 are required on amounts borrowed.

The SAFE line of credit is available even to borrowers with bad credit. To qualify, you must become a member of Great Falls Teachers Federal Credit Union. After remaining a member for at least a month, you become eligible to open the line of credit so long as you are currently employed.

Prior to approval, you must complete a financial analysis with a certified RDI advisor (through Rural Dynamics, Inc.). The analysis is free, and it is designed to help struggling families make better choices while understanding all of the options available to them. The purpose of the program is to "help families overcome temporary financial hardships and move them towards economic stability" according to Deb Evans, President of Great Falls Teachers Federal Credit Union.

Rural Dynamics was a proponent of interest rate caps, and now they provide the counseling component of this partnership. Tom Jacobson, CEO of RDI released the following statement:

The SAFE (Securing Access with Financial Education) line of credit provides the emergency credit sought by struggling families and does not discriminate based on credit history. Applicants are automatically approved once they have met the eligibility requirements (member of the credit union for at least one month, currently employed and have completed a financial analysis with a certified RDI advisor).

Unlike predatory payday loans that did nothing to improve credit scores, the SAFE line of credit is reported to the credit bureaus. Borrowers will have the opportunity to build positive credit history with the loan, thereby making it easier to qualify for subsequent car loans or even a home mortgage.

For more information, contact Great Falls Teachers Federal Credit Union at 406-727-7300 or 1-800-823-9595. To reach Gail Jacoby, Financial Services Officer, call 406-791-2883 for information about the SAFE line of credit.

By Kenneth Long on April 25, 2011

JP Morgan Chase & Co. has agreed to settle allegations that it overcharged some military families and wrongly foreclosed on several homes. Chase is paying $56 million to settle violations of the Servicemembers Civil Relief Act (SCRA).

Of the total, $27 million will be repaid to service members who were overcharged on mortgages when they should have been protected with a maximum 6% interest rate while on active duty. Some homes were illegally foreclosed on. Chase has promised to return those homes to military families.

Marine Corps Captain Jonathon Rowles found himself in a difficult situation when he lost his South Carolina home to foreclosure. Rowles was unable to challenge the foreclosure while stationed in South Korea. Instead of rolling over, Rowles and his wife filed suit in July 2010 challenging the legality of the foreclosure. Chase's announcement that errors were made validates Capt. Rowles lawsuit:

Frank Bisignano, Chief Administrative Officer at JP Morgan Chase delivered the statement on behalf of the financial giant. He went on to declare that Chase was taking extra steps to protect military families:

To ensure that Chase is viewed as a military-friendly lender, it has announced several initiatives to benefit the members of the armed forces. The most generous may be an even lower interest rate cap than required under SCRA. Chase borrowers will see their mortgage rates drop to 4% while on active duty and for a year afterwards. This matches a similar pledge made by Bank of America for 4% SCRA interest rates.

Any military borrowers who wrongly lost a home to foreclosure to Chase will receive their homes back. Furthermore, the remaining balance on their mortgage loan will be cancelled. Any service member who went on active duty after 9/11 may be eligible for an enhanced loan modification program at Chase.

To boost efforts to assist military families, six new Chase Homeownership Centers will be opened near the largest military bases. This should help affected families gain benefits through SCRA as well as provide a source of mortgage loans for prospective homebuyers.

Capt. Rowles thanked Chase for its efforts to repair past wrongs and released his own statement:

Chase has provided an online portal for military members (ChaseMilitary.com).

By Kenneth Long on April 21, 2011

Roni Deutch, the self-proclaimed "Tax Lady" that claimed a 99% success rate, has been shut down. Still, she continues to resist authorities who are trying to recoup some money paid by her defrauded clients.

California Attorney General Kamala Harris requested that contempt charges be filed on April 20, 2011. Deutch apparently has violated a court order filed August 31, 2010 that barred the defendant from destroying evidence.

California investigators estimate that Deutch has shredded approximately 2 million documents to hinder the investigation against her. Harris claimed that "Deutch has been routinely shredding documents on an almost a weekly basis."

In addition to destroying evidence, Deutch has been emptying bank accounts of funds that were supposed to go toward repaying her victims. Instead, the money has gone to her friends, family and even a NASCAR team. Roni Deutch sponsored the #06 Dodge, which was driven by David Starr in the 2009 Coca Cola 600 race in Charlotte, NC. Apparently her sponsorship was considered more important than repaying the victims of her firm, many of whom were completely wiped out by what is frequently referred to as the Roni Deutch tax scam.

California regulators have already taken steps to seize all funds held by Deutch's law firm as well as in her personal accounts. Still, Deutch managed to withhold hundreds of thousands of dollars in equity following the sale of her home to a media company. She withdrew $241,000 in business and personal holdings from a single bank while failing to issue $435,000 in client refunds within 60 days of a preliminary injunction filed by Harris on November 17, 2010.

The $34 million lawsuit filed against Deutch has stretched over many months. Since Deutch has violated several terms of the judge's orders, the attorney general has asked that contempt charges be filed against Deutch. Furthermore, fines of $1,000 a day and 5 days in prison for each count of contempt have been sought. It is expected that a receiver will be appointed by the court so that assets may be liquidated for the purpose of partially refunding her victims.

Attorney General Kamala Harris released the following statement:

Clients of Roni Deutch have little chance of receiving a substantial refund. This is a tough lesson for many to pay attention to reviews of tax relief firms and to check reliability reports on each company with the Better Business Bureau.