Payday Loan Firm Accused of Fraud, Excessive Fines; Owner Has Reportedly Fled California
By Paul RizzoPayday Loan Writer
A payday loan company with offices in Arcadia and Eagle Rock, Calif., faces allegations of deceptive business practices and fraud in a complaint filed Tuesday by the California Attorney General's Office.
The complaint, reports the Pasadena Star-News, will be heard in Pasadena Superior Court and seeks at least $2 million in civil penalties from the now defunct Fast Cash payday loan service. The complaint seeks $350,000 in restitution for the firm's former customers.
The company is alleged to have charged excessive and illegal penalties to customers who wrote bad checks to secure what are commonly known as payday loans.
"Fast Cash extorted outrageous amounts of money from its customers. They threatened lawsuits, tried to squeeze settlements, and, when that did not work, they deceived the court to win improper judgments against more than 400 customers," Attorney General Bill Lockyer said in a prepared statement.
Under California law, when a customer bounces a check used to secure a faxless payday loan, the lender can collect a penalty equal to the amount of the check, plus a $15 handling fee. The complaint alleges Fast Cash demanded customers pay four times the amount of the bad check, and took to small claims court any customer who refused to pay.
According to Aaron Carruthers, spokesman for the Attorney General, since a majority of the borrowers did not attend the hearings, and Fast Cash did not divulge the nature of its fast cash loans, the court generally ordered that the penalty be paid.
"We are asking the court to void any and all judgments that were made. We are also asking that they be barred from conducting this type of business again," Carruthers said.
The owner and founder of Fast Cash is Christoph Hoppe, 39. His last known address is in Laguna Hills, and he could not be reached for comment. His former in-laws say he fled the country last year, returning to his native Germany and leaving behind a trail of unhappy creditors, disgruntled ex-employees and failed schemes.
"This guy was all over the place, trying to get into God only knows what," said his ex-wife, Jennifer Bradley, who added that her former spouse also has a taste for expensive cars and bad business decisions.
Bradley now lives with her parents in San Marino, Calif. She said Hoppe spread himself too thin when he opened the two bad credit payday loan stores and was soon hemorrhaging money. She said he tried a number of other ventures in an effort to regain his financial footing, including an online real estate business and a small toy company.
When they failed, the California payday loan provider left the country, abandoning his business records in a Pasadena storage unit. Because the records contained sensitive information, such as Social Security numbers and bank accounts, Bradley said her family decided to have them destroyed.
