Little Rock, ARTwo online loan companies and their owners will have their day in court after the Attorney General of Arkansas accused the enterprises of providing illegal payday loans with interest rates far above what is allowable under state law.
According to a report by the Associated Press (AP), contracts provided to the office of the Attorney General by various consumers suggest that the companies have charged interest rates as high as 782 percent. Attorney General for the state of Arkansas, Dustin McDaniel, filed the lawsuits against Arrowhead Investments Inc. and Galaxy Marketing Inc. The owner of the two firms, Christopher Hodes, was also named in the lawsuit, which identified Hodes as controlling the enterprises.
The lawsuit, announced August 10th and filed in Pulaski County Circuit Court, seeks to stem the need for any consumers to pay such high interest rates on payday loans.
To that end the state would like to see the defendants barred from offering, or collecting upon high-interest loans—and the cancellation outright of all high-interest loans beyond state and moral limits.
The suit also seeks the return of all payments to borrowers.