Payday Loan Times

A South Carolina couple has filed a lawsuit claiming payday advance loan lenders attract borrowers to “unconscionable loans” and trap them in an endless cycle of trying to repay the loans.

State Sen. John Hawkins filed the lawsuit Tuesday on behalf of Mark and Rebecca Morgan of Horry County. Hawkins said he would seek to make the lawsuit class action.

The lawsuit names several instant payday loan lenders, including the nation’s largest, Spartanburg-based Advance America. Spokesman Jamie Fuller said the company was aware of the lawsuit but hadn’t seen the details.

“We can’t comment on the specifics of the case. We are going to defend our position strongly in court. We won’t try it in the media,” Fuller said.

The company doesn’t do anything illegal and “provides a needed service to consumers,” Fuller said. “Consumers have shown that this is a product that they like and use responsibly.”

Hawkins, a Spartanburg Republican, said the Morgans were representative of a larger group. They were “in debt up to their eyeballs,” due to cash advances he said, but would not provide specifics. Hawkins also would not make the Morgans available for an interview.

The borrowers are being “trapped into getting continuous loans to repay loans that should not have been made,” with the lenders accruing fees and interest payments along the way, Hawkins said.

The suit names payday lenders Advance America; Carolina Payday Loans; Check into Cash of S.C.; Check ‘n Go of S.C. and Local Cash Advance of S.C.

It claims the lenders violated the Consumer Protection Code with negligent lending practices, “breached their obligations of good faith, and engaged in a civil conspiracy to make unconscionable [personal loans].”