February 28, 2006 – Posted at 5:49 p.m. CST
JONESBORO, AR -- Payday-loan businesses seem to be popping up all over the country, offering quick money to those in need. But one right here in Region 8 is in some hot legal water.
Arkansas Attorney General Mike Beebe filed a lawsuit against Money In A Flash.Net in Jonesboro on Tuesday. It's a company that enters into internet service contracts with consumers, but also provides loans with what Beebe calls unlawful interest rates.
"They are just using the internet service as a scam or a scheme to get around the high interest rates, the interest rate limits so they can charge these higher rates and it's pretty blatant," said Beebe.
Customers would sign contracts and receive up-front loans disguised as "rebates." They were then required to make monthly or bi weekly payments -- with rates up to 520 percent. If the customer did not make payments in cash, the company automatically withdrew money directly from their bank accounts.
"We had some customers complain and had some other information provided by people who knew what was going on that weren't necessarily the customers," said Beebe.
On top of the payments, Money In A Flash.Net also charged an additional one-third of the "rebate" to any consumer who tried to terminate the one year contract.
The four owners named in this lawsuit are Robert Blake, Elaine Blake, Dwight Blake and Yvonne C. Clark...none of which were available for comment on this issue.