The managers of an illegal payday loan operation, based in Folsom and Las Vegas, were ordered to pay $100,000 in penalties, according to a final settlement announced Friday.
In the original complaint, filed in February 2012, Brian Bergfalk of Granite Bay and Eric Quinlan of Folsom were accused of charging excessive fees and operating without a state license for their two companies: TIOR Capital in Las Vegas and a Folsom-based loan servicing center, TTG Services.
Mark Leyes, spokesman for the state Department of Business Oversight, said TIOR issued hundreds , perhaps thousands of loans, just in California, during the year or so it was in business. The state says the company offered 24-hour, short-term cash loans of up to $1,500, advertising on Facebook and various websites, such as PaydayLoanCashVeryFast.com.
Since the original cease-and-desist order in February 2012, Leyes said, the company had stopped making California loans and voided existing loans. Overall, the companies forfeited about $1 million in pending transactions, Leyes said.
Efforts to reach Bergfalk and Quinlan were unsuccessful.
They were one of the bigger lenders in California, active across the country, said DBO spokesman Mark Leyes. He said the department wanted to get the word out to lenders who operate illegally that we will go after them and pursue them tenaciously.
In addition to being unlicensed in California, the state said, TIOR charged excessive fees, with interest rates topping 780 percent in some cases. For example, in October 2011, the company issued a $300 loan to a California resident, charging a $90 finance charge due in two weeks, which calculates to a 782 percent annual interest rate, the DBO said. When the borrower did not repay the loan principal in 14 days, the loan was automatically refinanced with an additional $90 fee, according to DBO.
According to state law, payday loan fees cannot exceed 15 percent of the checks face amount ($45 on a $300 loan) and additional refinance charges cannot be added to an existing loan.
Last month, the department issued citations against six other payday lenders in Sacramento County and other countries accused of violating California payday lending laws. They are: B&J Service Center & Check Cashing, Inc. (California); Cash Cure, LLC (Delaware); Cash Stand, Inc. (California); MamboCash (Costa Rica); The VIP Loan Shop (West Indies) and Zarvad III, also known as MyPaydayLoan.com (Costa Rica).
Call The Bees Claudia Buck, (916) 321-1968. Read her Personal Finance blog, www.sacbee.com/personalfinanceblog. Pa