Albany-- First American Cash Advance was charging between 400 and 600 percent interest on pay day loans. And amazingly, people were still taking out loans with them.
But that ridiculously high interest rate has now gotten the company in trouble.
A raid at First American Cash Advance on North Slappey confirms what customers complained about.
District Attorney Ken Hodges said "We have some here that have been charged 400, 500, even 600 percent interest." Seized records show at least one client paying nearly 1,000% interest.
Hodges said "As you can see they are charging 938.5% interest on a $250 claim."
Can you believe anybody would pay that? "It's hard for me to understand why anyone would do this. I think they just don't think about it." Investigators say they were trying to say the loans were made through a South Dakota bank.
Hodges said, "The percentage that the South Dakota bank gets from the revenue generated is very miniscule. And we think nothing more than a sham and a coverup to establish pay day lending here in Georgia, which is illegal."
By law, pay day loan businesses can only charge 16% interest on loans less than three thousand dollars.
Hodges said "These institutions are nothing more than loan sharks. They prey on people who can't afford to be preyed on, and get them in a spiraling circle of debt they can never recover from. I will put them out of business here in Dougherty County. We will not have people preying on the poor here in Dougherty County."
This is the second pay day loan business raid in Albany. Kool Kash in East Albany was closed last month for the same reason.
First American Cash Customers will still have to pay back the money they borrowed, but with no interest. First American Cash in Albany is owned by First American Financial Services, whose corporate offices are in Tennessee.