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Irving-based ACE Cash Express, one of the nation’s largest payday lenders, has agreed to refund borrowers $5 million and pay the U.S. government another $5 million in fines for using illegal collection tactics such as threatening criminal action against customers who fell behind on payments and informing their employers of the debt.,“ACE used false threats, intimidation and harassing calls to bully payday borrowers into a cycle of debt,” said Richard Cordray, director of the Consumer Financial Protection Bureau, which negotiated the settlement. “This culture of coercion drained millions of dollars from cash-strapped consumers who had few options to fight back.”,The Texas payday lender had collectors who threatened to sue delinquent borrowers, or used legal-sounding jargon to indicate possible criminal action could be taken — even though it never did, it said. One firm it hired was called National Attorney Collection Services Inc., whose employees referred to themselves as “National Attorney” in communications with consumers.,When a consumer “exhausts the cash and does not have the ability to pay,” an illustration in the manual says, ACE “contacts the customer for payment or offers the option to refinance or extend the loan.” Then, when the consumer “does not make a payment and the account enters collections,” the cycle starts all over again — with the formerly overdue borrower applying for another payday loan, the bureau quoted the manual as saying.,In November, Fort Worth-based Cash America International agreed to pay a $5 million civil penalty after the bureau alleged it had mishandled court documents in Ohio and overcharged military personnel on loans.payday loans opelousas la
At the time, Cash America had refunded $6 million to borrowers and agreed to set aside a further $8 million for possible future claims.,The most recent settlement was praised by the Center for Responsible Lending, an advocacy group long opposed to payday lending, which it claims takes in $3.4 billion a year. It said the bureau’s action confirms that such lenders “depend on keeping vulnerable consumers trapped in an endless cycle of debt of 300 to 400 percent interest loans.”,The U.S.
Hispanic Chamber of Commerce, in a Thursday news release that a spokesman said was based on talking points supplied by ACE, a corporate partner, praised the payday lender for being compliant, transparent and proactive in its efforts to right the collection process.

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