Payday Loan Times

Texas Attorney General Grag Abbott recently secured a court judgement against El Paso-based Advance Internet, an unlicensed payday advance loan lender.

According to court documents, Advance Internet’s owner John A. Gill Jr., used the guise of on-premises internet access and “instant cash” to lure customers into a cash loan lending scheme. Advance Internet’s customers, many of which were military families, were essentially tricked into entering fraudulent high-interest contracts.

In 2006, Abbott charged Advance with violation of numerous finance law provisions, among them, a provision requiring lenders to obtain proper licenses before making personal loans.

Consumer finance laws mandate that usurious interest contracts, like the majority of those written by Advance, are null and void. According to the Attorney General’s office, Advance tricked customers into entering contracts with interest rates as high as 782%.

Aside from El Paso, Advance maintained offices in Coryell, Bell and Bexar Counties, all counties in close proximity to military bases.

Abbott also argues that Advance Internet had an internet “rebate” program that was utilized to hook customers into debt.  Those instant payday loan borrowers signed up for monthly withdrawals from their bank accounts were given a $100 rebate.

Advance made monthly withdrawals from customer’s bank accounts until the entire loan, burdened by the inflated interest rates, was paid off.  Customers who paid off the loan early to avoid the heavy finance charges were assesed a “termination” fee equal to the $100 rebate they received.