Thousands of people who rely on pricey payday lending and check cashing stores across the state may be entitled to millions of dollars in restitution for predatory lending practices by some of the industry’s biggest players, San Francisco officials said Thursday.
City Attorney Dennis Herrera announced an outreach effort for those who have not yet filed claims outside a Money Mart on a forlorn corner of Seventh and Market streets, one of the company’s 10 locations in The City.
“In this city of great wealth, we shouldn’t have our most economically vulnerable people being taken advantage of by the proliferation of places like this, who are literally ripping people off,” Herrera said.
Herrera is working with City Treasurer Jose Cisneros, who has established programs helping connect people without bank accounts to “healthy, mainstream financial institutions,” Cisneros said.
The city attorney sued Money Mart and Loan Mart for unfair business practices in 2007, alleging that they were charging “usurious” interest rates of up to 400 percent. A settlement reached last year includes up to $7.5 million in reimbursements and commitments from the companies to eliminate excessive interest fees and penalties, he said.
California consumers who got short-term installment loans from Money Mart and Loan Mart between 2005 and 2007, or oversized payday loans from the companies in 2005, may be eligible for reimbursement of most of the interest, fees and finance charges they paid, according to the City Attorney’s Office.
But while the companies are working with The City on tracking down those owed restitution, records are sparse, Herrera said.
Consumers have until Oct. 1 to submit claims that could result in restitution between $20 and $1,800. The settlement hotline is (866) 497-5497. Claim forms are at www.sfcityattorney.org.
A similar settlement with Check ‘n Go is expected to be announced later this year.