Class Action Settlement for Online Payday Loan Applicants in California

Editor’s note: The CFPB, a federal agency, has proposed new rules for payday, car title, and high-cost installment lenders.

 

BUT, they need to hear from consumers- that means you! We have an easy-to-use page where you can weigh in- it only takes a minute and will help bring about important consumer protections with these loans. Please share a line or two in the comments box about why you care about this issue and want to see strong federal reforms.

PS: You do NOT have to be a payday, car title, or installment borrower to sign the petition.

Did you apply for a payday loan online in California and were you subsequently enrolled (without your permission) in online discount coupon programs and was your bank account debited to pay for these memberships?

If so, you might be eligible to participate in a new class action settlement. People who are eligible and submit a claim will receive a check for up to $60.

When people applied online for a payday loan, ZaaZoom Solutions, LLC, was alleged to have enrolled them (without their consent) into online membership program for discount coupon subscriptions, and then used remotely created checks (RCC) to pay for these memberships.

The online coupon sites include: Discount Web Member Sites LLC, Unlimited Local Savings LLC, Web Discount Club, Web Credit Rpt. Co., MegaOnlineClub LLC, RaiseMoneyForAnything, MultiEcom, LLC, Online Discount Membership, Web Discount Company, Liberty Discount Club, Online Resource Center, LLC, Web Coupon Site, USave Coupon, UClip.

The plaintiff in the case alleged that ZaaZoom, as well as two banks (First Bank of Delaware and First National Bank of Texas), broke the law by attempting to withdraw money from consumers’ bank accounts (without their consent) for these memberships.

The First Bank of Delaware settled the lawsuit but denied any wrongdoing.  The First National Bank of Texas has not settled, and that lawsuit is ongoing (stay tuned for an update).

For customers whose checks were “processed” by First Bank of Delaware between May 6, 2007 and January 15, 2014, they can submit a claim form to receive compensation of up to $60 if they remain part of the class.

Dates and Deadlines

Exclusion deadline:

Postmarked by April 28, 2014

Objection deadline:

Postmarked by May 26, 2014

Claim filing deadline:

Postmarked by April 28, 2014

Final approval hearing:

Scheduled for June 25, 2014 at 2:00 p.m.

If you’d like to learn more about this case, here are a couple of resources:

1)    Marsh v. ZaaZoom Solutions et al. settlement website.  (This is where you can complete a claim form and read Frequently Asked Questions about the case)

2)    Court house news service: “Judge Certifies Class in Electronic Check Scheme

3)    Marsh v. Zaazoom Solutions, LLC, Slip Copy (2012)

Please note: The California Reinvestment Coalition is NOT able to answer questions about this case for consumers.  We suggest reviewing the settlement website if you have questions.

This case is a good reminder about the dangers of online payday loans.  It’s difficult to know who has your information and how it will be used.  To see a real life example of an applicant’s information being shared with lots of other companies, read or listen to this NPR story:

I asked for $500 and, to be safe, I made up an address, a name (Mary) and a Social Security number. The site asked for more sensitive stuff — a bank account number and a routing number — and I made that up, too. In spite of the made-up information, in less than a minute, I got a response. I Applied For An Online Payday Loan. Here’s What Happened Next

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