If you borrowed money from payday lenders Money Mart or Loan Mart between 2005 and 2007 – perhaps paying interest of up to 400 percent – you may be eligible to get most of your money back.
Thanks to the settlement of a consumer protection lawsuit filed by the city of San Francisco, California victims of alleged illegal lending practices by the lender are eligible for between $20 and $1,800 in restitution.
Claim forms must be mailed by due Oct. 1. Settlement checks will be sent out early next year.
At a Tuesday news conference in front of a Hollywood Money Mart branch, Los Angeles City Councilman Eric Garcetti and San Francisco City Attorney Dennis Herrera urged eligible customers of "loan sharking" to file to get their money back.
"I want this money to go to the people who are entitled to it. I want the money to go to those who have been victimized by the unscrupulous actions of one of the largest payday lenders in the country," Herrera said.
Up to $7.5 million is available for tens of thousands of payday loan customers who can show they were victimized by the lenders, he said. The average repayment amount will be $570, according to documents on the San Francisco City Attorney's Office's website.
Herrera said he had done outreach in California cities with high concentrations of people who use payday loan services: San Francisco, Fresno, Sacramento and now Los Angeles.
Garcetti, who is running for LA mayor, lauded Herrera and the settlement.
"Businesses should not be in the business of defrauding their customers. But that's what happens all too often with payday lenders like Loan Mart and Money Mart," Garcetti said. "These payday lenders dig already hurting people into an even deeper hole."
The pair said they were amping up outreach because claim forms during the 90-day claim period are due soon.
"There is money out there for Angelenos and we want to make sure you get it," Garcetti said.
There are 32 branches of Money Mart and Loan Mart in the greater Los Angeles area, Garcetti noted.
Herrera's lawsuit, filed in 2007, alleged that Money Mart offered "CustomCash" loans to customers at interests rates in excess of the 36-percent limit imposed by California law.
Some customers were paying rates of up to 400 percent, keeping them in a vicious cycle of borrowing, Herrera said.
"We know that for folks that are down on their luck, oftentimes struggling or working-class families that are struggling paycheck to paycheck, $1,800 can make a big difference to their bottom line," he added.
Money Mart denied the lawsuit's allegations, saying it was settling the claims to avoid the uncertain outcome of litigation.
The company has stopped the alleged illegal lending practices, Herrera said. A Delaware bank that was the funder of the loans, First Bank of Delaware, has gone out of business, he said.
Eligible California customers are:
Dollar Financial Group, the parent company of Money Mart and Loan Mart, was also a target of the lawsuit.
Money Mart has locations in the Bay Area, the broader Los Angeles area and Inland Empire, the Sacramento area and in the Central Valley.