FEBRUARY 28, 2006 - Posted at 11:57 a.m. CST
JONESBORO, AR - Arkansas Attorney General Mike Beebe today filed a lawsuit against Money In A Flash.net of Arkansas, a Jonesboro company that, according to Beebe, "entered into contracts with consumers for Internet service that also included loans at unconscionable and unlawful interest rates."
Under terms of the contracts, consumers would receive up-front loans disguised as "rebates" from Money In A Flash.net, according to Beebe. The Attorney General said consumers were then required to make monthly or biweekly payments to the company - payments that translated into annual percentage rates of up to 520 percent. Under some contract terms, consumers would be obligated to pay $1,560 in a year in exchange for $300 in "rebates," according to Beebe.
"This is an especially egregious example of a company using deceptive practices to take advantage of consumers through illegal high-interest loans," Beebe said. "This company not only charged outlandish interest rates to customers who received these 'rebates', but they also withdrew the money directly from their bank accounts if they did not pay in cash on schedule. We will not allow this in Arkansas."
The lawsuit filed late this morning accuses the company and its four owners of misrepresenting the contracts as arrangements for Internet access when in fact the transition is a sham to disguise high-interest loans. Beebe is seeking an injunction to stop the loans, restitution for consumers and civil penalties.