CHARLESTON, W.Va. -- Attorney General Darrell McGraw on Wednesday sued eight companies for offering Internet payday loans that are illegal in West Virginia, demanding they immediately stop all lending.
The lawsuit in Kanawha Circuit Court also asks a judge to order the companies to surrender records of their accounts in West Virginia. McGraw said the companies have all refused to cooperate with his investigation.
Payday loans are typically made for 14 days with interest rates that can reach 600 percent to 800 percent. They are usually secured by postdated check or an electronic-debit agreement.
West Virginia law prohibits interest rates of higher than 18 percent on consumer loans.
"Payday loans are predatory traps for the many West Virginians facing difficult times," McGraw said.
The companies and individuals targeted are in five states -- Arizona, Delaware, Florida, South Dakota and California.
McGraw said some of the companies have a history of unscrupulous practices.
Since 2005, McGraw has settled lawsuits with 107 Internet payday lenders, collecting more than $2.4 million in refunds and canceled debts for more than 8,000 West Virginians.