A class action settlement by Cohen & Malad, LLP involving payday loans will help fund a new free legal service to help the city’s poor fight predatory lenders and other financial scam artists. The new service, known as the Consumer Advocacy Project, will be funded by more than $70,000 from the settlement and will be jointly run by non-profits Indiana Legal Services, Inc., and Heartland Pro Bono Legal Council, Inc., which were selected by Marion Circuit Judge Louis Rosenberg to oversee the project.
“There are few things worse than a business set up to make millions by scamming people who are literally not even living paycheck-to-paycheck,” Cohen & Malad attorney Vess Miller said. “Shortly after we filed this lawsuit, this payday lender decided to close its doors. We’re happy that now it will also pay to help the poor fight back.” Miller estimates roughly $1 million in loans were voided by the settlement. He lauded Judge Rosenberg’s selection of Indiana Legal Services and Heartland Pro Bono to spearhead the project, noting their histories of helping the poor obtain legal representation.
The lawsuit, Edwards v. Apex 1 Processing, Inc., was filed in 2010. The suit alleged that online payday lender paychecktoday.com made loans to more than 1,300 Hoosiers at interests rates exceeding 700% APR, violating Indiana’s payday loan laws. The lender tried to avoid class-action status through individual arbitration, and sought appeal to both the Indiana Supreme Court and ultimately the United States Supreme Court, but was denied.
The new project complements Cohen & Malad’s endowment of a fellowship at the Indiana University McKinney School of Law to help consumers. The firm is known for its work in returning hundreds of millions of dollars to Hoosiers through class action lawsuits, including suits against the Indiana Bureau of Motor Vehicles for overcharging on licenses and other fees, and against local concrete companies for fixing the prices charged to local construction companies. This is the firm’s third settlement against online payday lenders.