Attorney General Hardy Myers today announced that an unlicensed "payday" loan operation is out of business in Bend after the Department of Justice obtained a temporary restraining order and filed a lawsuit in Deschutes County Circuit Court. Named in a lawsuit filed late Thursday on behalf of the Department of Consumer and Business Services (DCBS) are A 1 Cash Advance and owner/manager Tim Stroud of Bend, also known as Tim Loren.
A show cause hearing has been set in Bend for February 7, at which time it will be decided if the restraining order will be continued, pending the trial.
"This company refuses to abide by state licensing and registration laws and has illegally been collecting interest on hundreds of short-term, high interest rate loans, " Myers said. "Not only are the defendants unlawfully charging customers four to five hundred percent interest on loans but they are using the courts to collect on debts that are the direct result of illegal activity."
DCBS and Justice investigators found that A 1 Cash Advance in 1999 registered to do business in Oregon and did obtain a license to make loans but voluntarily cancelled the license and business name registration a short time later, refusing to renew with DCBS or the Secretary of State.
Deschutes County Court records show that in the last two years, A 1 Cash Advance has filed 153 cases against its customers for delinquent loans, in which the interest rates range from 400 to 500 percent. State investigators also obtained documents that indicate A 1 advises its customers not to list loans from A 1 Cash Advance when filing for protection under the federal bankruptcy laws. The US Bankruptcy Trustee's Office has warned the defendants against the practice. Stroud also has advised customers to repay the loans in cash so he can evade payment of taxes.
The lawsuit asks for a permanent injunction against the defendants from operating a Short-Term Personal Loan company in the state and for return of all the illegally obtained interest collected on the loans since December 17, 1999 to the present. If the amounts of money are too small or the disbursement is too difficult because the customers cannot be identified, the interest will go to the State of Oregon.
Consumers wanting information on payday loans or consumer finance in general may contact the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) or toll-free at 1-877-877-9392. Justice is online at www.doj.state.or.us.
Oregonians may check on the licenses of lenders by calling the Division of Finance and Corporate Securities, DCBS, at (503) 378-4140 or online at www.oregondfcs.org.
Jan Margosian, (503) 947-4333 (media line only) firstname.lastname@example.org
James Krueger, DCBS, (503) 947-7362 (media line only)