CFPB orders EZCorp to pay $10.5M for illegal debt collection tactics

WASHINGTON – The Consumer Financial Protection Bureau last week reached a settlement with payday lender EZCorp Inc., which must pay $10.5 million in penalties and refunds.
EZCorp, headquartered in Austin, Texas, provides high-cost, short-term unsecured loans throughout the country under various names, including EZMoney Payday Loans, EZ Loan Services, EZ Payday Advance and EZPawn Payday Loans. The CFPB found the company conducting illegal debt collection practices, including illegal visits to consumers at their homes and workplaces, empty threats of legal action, lying about consumers’ rights and exposing consumers to bank fees through unlawful electronic withdrawals, according to a press release.
“People struggling to pay their bills should not also fear harassment, humiliation or negative employment consequences because of debt collectors,” said CDPB Director Richard Cordray. “Borrowers should be treated with common decency. This action and this bulletin are a reminder that we will not tolerate illegal debt collection practices.”
The federal bureau says EZCorp announced it would cease offering payday, installment and auto-title loans in the United States after the CFPB launched its investigation in July.
“Given our decision in July 2015 to exit all payday, installment and auto-title lending activities in the United States, we believe it is in the interests of all stakeholders to bring this issue to an amicable close,” said EZCorp CEO Stuart Grimshaw in a statement.
The bureau has ordered EZCorp to refund $7.5 million to 93,000 customers, pay $3 million in penalties and stop collection of remaining payday and installment loan debts owed by roughly 130,000 consumers, according to the release. It also bars EZCorp from future in-person debt collection.
As a part of the settlement, EZCorp does not have to admit or deny any of the facts or conclusions of law, according to an EZCorp press release. The $10.5 million charge will be included in the company’s financial statements of the year ending Sept. 30, 2015.
“Our focus will continue to be on responsibly and respectfully meeting our customers’ need for access to cash when they want it through our pawn business lines,” Grimshaw continued. “We will also continue to enhance our policies, processes and procedures to improve our business performance and profitability.”

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