Advance America Cash Advance Centers Agrees $18.75 million Settlement

This is a settlement for the Consumer and Financial Fraud lawsuit.

Spartanburg, SC: Advance America, Cash Advance Centers Inc has agreed to pay $18.75 million to settle a class-action lawsuit without admitting violating any state consumer finance laws, according to an SEC filing.

The Spartanburg-based provider of payday and other loans said it would establish a settlement pool to compensate North Carolina class members, besides paying attorney fees, class-action administration fees and other expenses. The agreement is subject to court approval and other conditions.

The suit (Kucan et al. v. Advance America, Cash Advance Centers of North Carolina Inc. et al) accused Advance America of violating state consumer finance laws in handing out payday loans since 2003. Advance America expects to take a charge of between $16.25 million and $18.75 million against earnings in the third quarter.

About 144,000 borrowers will share $12 million, or $83 each, after payment of legal fees and other expenses, according to the Associated Press. The payments will be made in three installments, starting this month and ending on Jan. 2, 2012.

Advance America has been led since 2005 by President and CEO Kenneth Compton, a 25-year management veteran. Previously, he was president of the global automotive group of Milliken & Co., an international textile and chemical manufacturer headquartered in Spartanburg.