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Class action lawsuit filed against largest payday lender in the United States

August 6th, 2007 by John Campbell

NEWS RELEASE

August 6, 2007

St. Louis – A predatory lending class action lawsuit was filed today in Cole County against Advance America, the largest payday lender in the United States. At the heart of the lawsuit is the allegation that Advance America systematically traps customers in loans they cannot repay by violating Missouri law. 

The suit was filed against Advance America, a Spartanburg, S.C.-based company and its subsidiaries Cash Advance Centers of Missouri doing business as Advance America.  The company operates 2,900 cash advance stores in 37 states. Approximately 82 stores are located in Missouri.

The lead plaintiff is St. Louis County resident Cynthia Williams.  Beginning in March 2006, Ms. Williams was trapped in a cycle of debt after taking out a loan with Advance America.  She and her husband began working 70-hour weeks to pay off the debt.

The suit alleges that while state law allows borrowers to repay the loans in up to six payments, Advance America limited borrowers to four payments. Borrowers were then trapped in loans charging over 400 percent interest, despite laws that effectively capped interest at 324 percent.

The suit claims Advance America engaged in several other predatory practices that violated Missouri law.  Those allegations include:

• Advance America exploited borrowers’ financial situation; intentionally loaning too much money at an interest rate over 400 percent that trapped them in a cycle of debt;
• Advance America created phony “new loans” and encouraged customers to take these out rather than make payments to reduce their existing loan.

St. Louis lawyers John Simon, Erich Vieth and John Campbell of Simon٠Passanante P.C. and Debra K. Lumpkins of Gateway Legal Services filed the lawsuit on behalf of the borrowers.  This is the first class action lawsuit filed against Advance America in Missouri.

Simon Passanante and Gateway Legal Services also have class action cases pending in St. Louis County and St. Louis City against three other payday lenders, including the second largest private payday lender in the country, Overland Park, Kan.-based Quik Cash.

“Missouri law is designed to protect Missouri citizens by getting them out of payday loans as quickly as possible and by capping the amount of interest charged on a loan. Advance America has short-circuited these protections,” said John Campbell of Simon٠Passanante.

St. Louis-based Simon٠Passanante P.C. handles catastrophic injury, mass tort, class action, intellectual property and commercial litigation cases nationwide. For more information contact John E. Campbell at 314-241-2929 or jcampbell@simonpassanante.com.

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