Lawsuit Filed Against Kansas City Payday Loan Companies

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

KANSAS CITY, Mo. -- A Kansas City man and his companies are in the middle of a lawsuit filed on Monday by the attorney general of another state. Arkansas AG Dustin Mc Daniel says says Josh Mitchem is charging through the roof interest rates through Payday Loan websites.

Court documents list the address of 3543 Broadway as where the website was operated. Company officers told FOX 4 they are no longer there. Wherever they are, the Arkansas AG's office is hoping to keep them out of its state for good.

The 23 page Consumer Protection lawsuit details the Arkansas AG's allegations against Mitchem and two companies PDL Support LLC and Platinum B Services. The documents say six online Payday lenders the companies and Mitchem support have been offering illegal loans with interest rates sometimes reaching
600 percent.

"They go into a cycle of debt. We want to avoid that. We don't think it's a good business practice."

The Arkansas AG's Office says the total number of complaints have shot up to about 700 in 2011 compared to 400 in 2010. Those numbers are no surprise to Communities Creating Opportunities or CCO which says Missouri itself has a major problem with predatory lending.

"Missouri for all intense and purposes is dead last among the states in the ways it limits payday loans, so it's not surprising that this kind of activity would be coming out of the state of Missouri,"

Volunteers for the non-profit say they're trying to get a ballot issue passed that would cap the interest rate on small dollar lending to 36 percent in Missouri. That would include online lenders as well.

Mitchem is out of the country on a business trip. He said in a statement to other media, "All websites are controlled by the lenders themselves and that the company has no control over the development or issuing of loans.'

The Arkansas AG's Office says the websites are purported to be based in the Caribbean Island of Nevis but lending operations are based in Kansas City. It hopes to prohibit this type of lending in their state with this lawsuit.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s