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OFIS Commissioner Orders Payday Loan Companies to Stop Overcharging Consumers
FOR IMMEDIATE RELEASE
April 4, 2008
Contact: Jason Moon 517-335-1700
|LANSING- Today Office of Financial and Insurance Services (OFIS) Commissioner Ken Ross ordered the state's deferred presentment licensees-also known as payday lenders-to stop illegally overcharging their customers for returned checks. Under the Deferred Presentment Service Transaction
Act, companies can charge customers a maximum of $25 for a returned check due to insufficient funds. This means they can only collect the face amount of the check, a returned check charge of $25 and if there is a lawsuit, court costs. It has come to OFIS' attention that some companies are violating the act and are filing lawsuits against customers seeking to collect up to twice
the amount of the face value of a returned check.
"Serious allegations have been made that some licensees are ignoring the law and we have initiated an investigation," said Ross. "If we find violations, our priorities will be to make consumers whole and take whatever steps are necessary as provided in law."
If the Commissioner finds that a company knowingly violated the Deferred Presentment Service Transaction
Act, he may order them to pay a civil fine of up to $50,000 for each violation
or revoke the deferred presentment license.
Michigan consumers believe they have been a victim of this practice, they should contact OFIS toll-free at (877) 999-6442 or online at
Currently, OFIS regulates and has licensed nearly 800
Michigan deferred presentment companies. Access to licensee information may be found at
To view the Deferred Presentment Service Transaction