By Kenneth Long on January 25, 2012

Arkansas Attorney General Dustin McDaniel filed suit against online payday lenders controlled by Josh Mitchem. His companies, PDL Support LLC and Platinum B Services LLC routinely charge interest rates that exceed 600% APR. One contract reflected an APR of 644.12%.

The companies lend money through the following online payday lending brands:

• Action Payday
• Bottom Dollar Payday
• Everest Cash Advance
• Paradise Cash Advance
• Red Leaf Lending
• The VIP Loan Shop

According to McDaniel's investigation, all lending operations were based in Kansas City, MO even though the websites claimed that operations originated in the Caribbean island of Nevus. Although some states like North Carolina have balked at pursuing online lenders that violate the state usury limit, Arkansas has sent a strong message to usurious payday loan providers. Dustin McDaniel released the following statement:


Interest rates above 35% are generally considered to be usurious in nature, meaning that those companies that supply such loans are predatory in nature. The interest rates charged in these cases are up to 18 times higher than that!

Arkansas residents who have loans outstanding to one of these lenders may be granted a release from the debt by contacting the office of the attorney general. Call 501-682-2341 or toll-free 800-482-8982.

By Kenneth Long on January 23, 2012

You may not know it, but if your income was substantially different last year, you might be eligible for a refundable tax credit. If you were out of work for a few months or took a major pay cut, you may qualify for extra money in your tax return that you never were eligible for before.

I have personally witnessed it several times in which an individual or family who has never qualified for the Earned Income Tax Credit (EITC) suddenly found that they were eligible for a much higher refund. This refund is much higher when children are involved, but even a single tax filer with no dependents may qualify for a few hundred bucks on top of their normal refund.

The EITC is geared towards lower income families or individuals (those earning less than $49,000 in 2011). It is designed to reward tax filers who worked but did not earn as much as others in the community.

Many tax filers who do their own taxes are not familiar with the EITC and often fail to claim benefits that they qualify for. Fortunately, anyone who fails to claim the EITC has 3 years to file an amended return (Form 1040X) and claim the refund for which they were entitled to.

Several paid tax preparation companies that are very well known offer to take a look at previous years' tax returns. However, the easiest way to claim the EITC for this year or within the last 3 years is to visit your local free Volunteer Income Tax Assistance (VITA) community partner. Their volunteers are trained by IRS and can help you determine if you meet EITC guidelines for a larger refund.

Most VITA partners are associated with a local charity, such as the Wake EITC Coalition which is organized by Vision Credit Education and the Family Resource Center of Raleigh. The Wake EITC Coalition has received funding from IRS, United Way of the Greater Triangle, the City of Raleigh, Republic Bank and this organization.

The easiest way to find your closest VITA site is to call the United Way's community hotline by dialing 211 or by visiting 211.org. Find out what the EITC is and whether you may actually qualify for a higher refund than ever before.

By Kenneth Long on January 16, 2012

Illinois Attorney General Lisa Madigan announced that her office has filed a lawsuit against PN Financial Inc. of Skokie, IL and its owner, Nelson Macwan. The debt collector must now defend itself against allegations that it committed numerous state and federal collection law violations. Madigan revealed certain violations committed by the collector during an announcement of major complaints fielded by her office.

Revealing the Nature of Debt to Third Parties

Madigan claims that PN Financial repeatedly revealed the nature of consumer debt to a debtor's family, friends, neighbors or employers. All are illegal.

A debt collector may legally contact an employer or other third party for the sole purpose of tracking down an elusive debtor. They may not contact third parties when they are already in contact with the debtor. Furthermore, any contact to a third party cannot reveal that a debt is owed.

Fronting as a Law Firm

PN Financial reportedly sent collection letters that insinuated that it was a law firm. To further intimidate debtors, the agency even provided false court case docket numbers on the letters.

By appearing to be a law firm, debtors falsely believed that they were being sued for debts. Panicking debtors were more motivated to avoid the possible consequences of judgments, including bank levies and wage garnishments.

Exceeding Authorized Debits

When some debtors provided access to their bank accounts, PN Financial debited more money than the debtor authorized. In many cases, cash-strapped debtors incurred numerous overdraft fees from their banks as a result.

Debt collectors are prohibited from drafting more than a debtor specifically authorizes. Debtors can protect themselves by sending money orders at regular intervals if they want to prevent unauthorized access to their checking accounts.

Unauthorized Credit Report Pulls

PN Financial did not have authorization to access debtors' credit reports. It did so as a method of intimidation.

Madigan stated that consumers "still have the right to be protected against illegal harassment and fraud." She seeks more than just fines or other penalties. Madigan intends to bar PN Financial from ever doing business in Illinois again.

By Kenneth Long on January 1, 2012

West Virginia Attorney General Darrell McGraw sued Liberty Mutual Insurance Company for violations of the West Virginia Consumer Credit and Protection Act. The insurer reportedly required body shops to use salvaged, used or reconditioned parts even though state law requires the option to use new parts.

The state's law applies to vehicles that are less than 3 years old. Insurers cannot force owners to agree to lower payouts that are based on reconditioned, remanufactured or otherwise used parts.

The pressure placed on car owners to accept repairs utilizing substandard parts can be substantial. Insurers commonly guarantee repairs as a way of convincing drivers to agree to smaller settlements. Repair shops use the parts designated by the insurer unless the driver pays out of pocket for new OEM parts--parts that should have been specified by the insurance adjuster.

Affected drivers do not have to agree to substandard or used parts. However, the attorney general found that in many cases Liberty Mutual partnered with Greg Chandler's Frame & Body, LLC aka Greg's Body Shop to require the use of cheaper parts in violation of West Virginia law. The body shop was also sued by McGraw's office.

If you were affected by an insurer whom you believe pressured you to accept a smaller settlement that includes substandard parts, you should contact the office of the attorney general in your state. Affected West Virginia drivers should contact the attorney general at 1-800-368-8808.

How to Protect your Rights in an Accident

When you are at fault, then you may have limitations in your use of new OEM parts when repairing your vehicle. Your rights depend on the fine print of your policy as well as state law. Using the right insurance provider can make the difference. Relying on reviews of insurance providers can be one starting point, as the cheapest providers may provide less protections when you actually need to file a claim.

If you were hit by someone else, you have zero responsibility to accept any settlement that does not involve 100% new OEM parts. When the insurer pressures you to use alternative parts, simply threaten to report their potentially illegal behavior to regulators to make sure you get the right parts that you deserve.

Finally, avoid going to a "company shop." Insurance companies love to partner with preferred repair shops who specialize in keeping their costs low in exchange for a steady stream of new business. Instead, contact your local dealer and ask which repair shops they recommend for the best repairs. That way, you are the customer, not the insurance company.