The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
A short-term, high-cost lender that tried to collect debts by in-person visits at borrowers’ homes and workplaces has ceased dealing in payday loans, and about 200,000 consumers will get refunds or debt collection relief, federal regulators said Wednesday.
Austin-based EZCORP is accused of potentially revealing details about consumers’ debts to third parties during home or workplace collection attempts, a violation of federal law. The firm is also accused of simultaneously initiating electronic transfers valued at 50%, 30%, and 20% of a consumers’ outstanding debt balance, causing overdrafts and other problems for borrowers.
EZCORP operates a collector of pawn shops in and around Texas, and until recently, provided high-cost, short-term, unsecured loans, including payday and installment loans, in 15 states and from more than 500 storefronts. It did this under names including “EZMONEY Payday Loans,” “EZ Loan Services,” “EZ Payday Advance,” and “EZPAWN Payday Loans,” the CFPB said.
In a consent order, the bureau ordered EZCORP to refund $7.5 million to 93,000 consumers, pay $3 million in penalties, and stop collection of remaining payday and installment loan debts owed by roughly 130,000 consumers.
“People struggling to pay their bills should not also fear harassment, humiliation, or negative employment consequences because of debt collectors,” CFPB director Richard Cordray said in a statement. “Borrowers should be treated with common decency. This action and this bulletin are a reminder that we will not tolerate illegal debt collection practices.”
In July, after the CFPB announced its investigation of the firm, EZCORP announced that it would cease offering payday, installment, and auto-title loans in the United States. The public firm, which trades on the NASDAQ stock exchange, continues to operate pawn shops.
EZCORP did not admit or deny the CFPB’s consent order, but said it had settled with the bureau as a way to put legacy issues behind it.
“Given our decision in July 2015 to exit all payday, installment and auto title lending activities in the United States, we believe it is in the interests of all stakeholders to bring this issue to an amicable close,” EZCORP Chief Executive Officer Stuart Grimshaw said in a written statement. “Our focus will continue to be on responsibly and respectfully meeting our customers’ need for access to cash when they want it through our pawn business lines. We will also continue to enhance our policies, processes and procedures to improve our business performance and profitability.”
Describing in-person visits in the consent order, the CFPB says that EZCORP representatives involved third parties in their collection efforts. “If a consumer was not present or not available to speak during an in-person collection visit, then Respondent’s employee would attempt to leave a letter for the consumer with a third party, such as the consumer’s supervisor, co-worker, parent, child or roommate,” the order says.
“Third parties at consumers’ workplaces at times refused to accept these letters because the consumer could not engage in personal business matters at work. In addition, at times, Respondent’s employees were turned away from a consumer’s workplace by a third party, such as a supervisor, co-worker, receptionist or security officer, because the consumer was not permitted to have personal visitors at work,” the order said.
In a press release, the CFPB also alleged that the firm:
Image: iStock
March 8, 2021
Personal Loans
April 8, 2020
Personal Loans