Check 'n Go settles suit with refunds
Marco Chavarin of the San Francisco treasurer and tax collector's office holds the oversize check symbolizing the $4.3 million settlement from Check 'n Go, which agreed to pay refunds to customers. Photo: Michael Macor, The Chronicle / SF
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Thousands of Californians who were charged interest rates of up to 400 percent by a payday loan company could be eligible for refunds under a $4.3 million settlement agreement, San Francisco City Attorney Dennis Herrera said Thursday.
Herrera hopes that a publicity campaign will reach anyone who obtained an online loan between November 2006 and June 2008 using Check 'n Go, one of the nation's biggest storefront lenders with two locations in San Francisco. Affected borrowers have until March 28 to claim a refund ranging from $20 to $4,675.
"The strongest statement we can make against predatory lending in California is to maximize restitution for every borrower who deserves it," Herrera said at a City Hall news conference. "We intend to work tirelessly over the next three months to get the word out to consumers about their rights, and to identify as many potential claimants as possible."
Herrera's office sued payday lenders Money Mart, Loan Mart and Check 'n Go in 2007 for loaning money at unlawful interest rates. Money Mart and Loan Mart settled in 2011 and paid a total of $5.5 million. More than 8,100 refunds were handed out after a three-month push this year, with an average restitution of about $700.
To help spread the word about that settlement, Herrera's office made a parody video of the hit "Call Me Maybe," titled "Pay Me Maybe," which he said led to an increase in claims.
So far, there are no plans to do the same for this settlement, which was reached with Check 'n Go in June. The agreement terms do not require the company to admit wrongdoing, but will offer reimbursements to affected customers.
Herrera alleged in his suit that Check 'n Go was working with an out-of-state bank to charge customers more than California's interest rate and loan principal limits. He said that San Francisco has one of the highest densities of payday lenders in the country.
"Many times, payday lending operations take advantage of our most economically vulnerable who might not believe they have an alternative lending service available to them," Herrera said, adding that the city has partnerships with credit unions to offer borrowers lower interest rates than predatory lending companies.
Herrera said he'll be traveling across the state and working with community leaders to promote the refund campaign.
"We're going to do what we need to do to get the word out, to make sure that the maximum number of people who are entitled to a refund will get one," he said.
Herrera also noted that the refund drive comes at a time of year many individuals are facing financial hardship.
"It's an added sweetener that we're announcing this in the holiday time when we know that folks are struggling," he said. "If we can bring a bit of a relief to them to or help them on a path to financial stability, that's a rewarding thing."
To file a claim
Customers who think they may be eligible for a refund can visit www.caloanrefund.org and download a claim form. The form must be mailed to the settlement administrator by March 28 with a copy of identification, such as a driver's license, bank statement or utility bill. Anyone eligible for repayment should receive a check no later than July