LANSING, Mich. -- Citing not-sufficient-funds abuse, the Michigan Office of Financial and Insurance Services is cracking down on payday lenders with $50,000 fines or license revocation on customer overcharges.
"It has come to OFIS' attention that some companies are violating the Deferred Presentment Service Act and are filing lawsuits against customers seeking to collect up to twice the amount of the face value of a returned check," declared OFIS Commissioner Kenneth Ross in a press statement.
Under Michigan law, said Ross, payday firms can charge customers a maximum of $25 for a an NSF check, but "this means they can only collect the face amount of the check, a returned check charge of $25 and if there is a lawsuit, court costs."
"Serious allegations have been made that some licensees are ignoring the law and we have initiated an investigation," said Ross. "If we find violations, our priorities will be to make consumers whole and take whatever steps are necessary as provided in law."
If the regulator finds a company "knowingly violated the Deferred Presentment Service Transactions Act, he may order them to pay a civil fine of up to $50,000 for each violation, or revoke the deferred presentment license. "
--jrubnscut@aol.com
