Settlement reached in Check Cashing Store lawsuit PDF Print E-mail
Written by Elgin Jones   
Friday, 01 June 2007
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WEST PALM BEACH- Consumers who have received “payday loans” from The Check Cashing Store may be eligible to receive money from a class-action lawsuit settlement.

“If the settlement is approved by the arbitrator and the court, it will resolve the claims of those individuals who entered into deferred presentment transactions, also known as payday loans with [The Check Cashing Store] prior to September 30, 2001,” reads one section on a website set up to inform consumers about the settlement.

John Cardegna, a Check Cashing Store customer, filed the lawsuit in Palm Beach County Circuit Court in May 2000.

Attorney Theodore J. Leopold is representing the prospective plaintiffs, but neither he nor the attorneys representing the store responded to requests for comment.

The lawsuit alleges that The Check Cashing Store, which has locations in Broward, Miami-Dade and Palm Beach counties, violated Florida laws by charging more than the legally permitted maximum interest rate on the loans.

Here’s how the process worked: A customer would make out a check to the store and receive cash equal to the face amount of the check minus the fees charged by the store.

The customer also signed a form agreeing that the store would hold the check for a set period, usually two weeks, and at the end of that time the customer could either “buy back” the check, or allow the check to be deposited by the store for its face value.

Some of those transaction periods could be extended, renewed, or rolled over for an additional fee.

The store contends in court documents that it legally authorized check-cashing transactions, and denies that it ever violated any laws.

Nevertheless, the parties have reached settlement terms in which the store will pay $7 million into a fund.

Attorney’s fees, costs and expenses associated with the litigation will be paid from that fund, which will be capped at $2.1 million. The remaining $4.9 million will be divided among the estimated 70,000 people who are eligible to file claims. The amount each person receives will depend on the number of people who file claims and the amount of fees each paid to the store.

If the money were divided evenly among all 70,000 people who are eligible to file claims, each person would receive $70.

The case is limited to those who engaged in payday-loan transactions before September 2001, when there was no law allowing such transactions, the suit contends.

In October 2001, the state Legislature amended the Money Transmitters Act, licensing check-cashing operations to charge a fee and engage in payday loans.

The settlement has received preliminary approval from the judge in the case. A final hearing is set for July 25, when the judge is expected to approve it.

Those who may have been affected have until Aug. 30 to file claims.

Interested parties can call 1-800-466-8904, or go to the settlement website at: www.ccssettlement.com.

The Check Cashing Store will pay $7 million to settle a class-action lawsuit claiming that the company overcharged customers for payday loans.
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