The financial regulators in Maryland gave a cease and desist order to a Kansas Firm allegedly over collections of illegitimate payday loans despite numerous and repeated warnings to stop collecting loans payments.
The state’s Department of Labor, Licensing and Regulation suspended the debt-collection license of Smith Haynes & Watson last week after receiving several complaints from residents. This temporary action will be irrevocable if the department will not receive a request for a hearing from the firm 15 days upon receipt of the order.
The company has been tasked to collect payments for payday loans and other short term loans that is not legally accepted by the state from the residents. These loans were given to consumers by illegal lending companies whose interest rates are way higher than what is allowed bu the state.
In one instance, a resident was approved of a $300 loan payable within two weeks with a $90 finance charge which has a 995% annual interest even though Maryland has given a payday loan law caps at 33% annual interest rate for $1,500 or less loans.
Acting Deputy Commissioner for Financial Regulation Anne Balcer Norton said that their department has already notified Smith Haynes & Watson not to collect such loans payments but despite the notice, the company continued on their debt collection. They also threatened one debtor that they have “placed a grievance” on her Social Security Number.
Norton said that this is really frustrating because it is a combination of unsavory business practice couple with threatening and disturbing collection practices.
Smith Haynes & Watson have no comment as of this time.