Posted May 08, 2007 06:04 pm CDT
State regulators in Nevada have imposed a record $50,000 fine on a payday lender, Leads Global Inc., which was ordered in March to stop doing business there.
The action was announced Monday by the Nevada Financial Institutions Division, in response to a $200 loan made by a Reno-based payday lender over the Internet to a Michigan woman. She eventually paid $857 to settle the loan, after enduring telephone and workplace harassment, reports the AP.
The harassment and unlicensed lending activity, among other alleged violations, are what got Leads Global into trouble, the AP article explains. The lender also reportedly violated applicable standards by not properly disclosing to the Michigan borrower the terms of her loan. In addition to the $50,000 fine, it was ordered to repay the borrower in this case $1,054.
So-called payday lenders typically advance money to borrowers for a short period prior to when their next paycheck is due. They are controversial due to a common practice of rolling over the loan at payday, if the borrower cannot afford to repay it in full – for a hefty additional cost above and beyond the original loan terms. Leads Global hung up when called for comment by the newspaper.