February 6, 2007
Kansas City, Mo. — Attorney General Jay Nixon is taking action against an Independence payday loan business that offered unsecured loans to and collected fees from consumers without a license. The Attorney General filed a lawsuit today in Jackson County Circuit Court against Kathy Moore, who does business as Kathy's Payroll Express, seeking an injunction, restitution and penalties.
According to Nixon, the defendant's business offered loans of under $500 to area consumers. State law requires such lenders to be licensed to ensure that they maintain proper records, provide consumers with notice of loan terms and expenses and prevent them from charging excessive interest and fees. Contracts entered into between consumers and unlicensed lenders are void.
Nixon says that on January 1, 2006, the Missouri Division of Finance did not renew the defendant's license to sell loans. The Division of Finance notified Moore in March 2006 that her license had not been renewed, and that she would have to refund consumers any interest and fees paid on loans that were made while the business was unlicensed. According to a transaction register report provided by the defendant, her business entered into 195 loan agreements with consumers between Jan. 1 and April 28, 2006, collecting $9,011 in fees.
“Lenders in Missouri are required to be licensed for a good reason, and that's to protect consumers from fraud,” Nixon said. “The defendant ignored the law and kept selling loans without bothering to renew her license, and now must answer for that.”
Nixon is requesting that the court issue an injunction against the defendant prohibiting her from continuing to advertise, offer for sale or sell loans without a license. He also is asking the court to order the defendant to pay full restitution, a civil penalty of $1,000 per violation of Missouri consumer protection laws and court costs.