Florida Consumers Win Ruling Striking Down Payday Lenders Class Action Ban as a Violation of Public Policy

PALM BEACH GARDENS, Fla.-In a decisive victory for Floridians this week, a Palm Beach County Circuit Court judge Elizabeth Maass has denied McKenzie Check Advance's (MCA) Motion to Stay and Compel Arbitration in a class action lawsuit against the payday loan provider. The court found that the enforcement of the class action ban embedded in the company's arbitration clauses in their loan contracts would violate public policy and are void.

"The Court has ruled that a contract term banning class-wide arbitrations in nation-wide payday lender McKenzie Check Advance's loan agreement is non-enforceable," said Ted Leopold, managing partner in the Palm Beach Gardens consumer justice law firm of Ricci~Leopold, who represents the plaintiffs Tiffany Kelly and Wendy Betts. "This is a victory for all Floridians, as these companies charged interest rates well above Florida's criminal usury limit of 45% and prey on people with low incomes. This business is comparable to loan sharking," he said. Leopold, along with his co-counsel, Clay Yates of Fort Pierce, Christopher Casper from Tampa, Richard Fisher from Tennessee and Paul Bland an attorney with the national public interest law firm "Public Justice," in Washington, D.C., has brought this important consumer protection class action lawsuit.

McKenzie Check Advance, which did business as National Cash Advance, was licensed by the Florida Department of Banking as a check cashing service under Florida Statutes and was acquired by Advance America, Cash Advance Centers, Inc., in 1999. The Corporation has over 2,900 stores across the country and issues payday loans to anyone who can verify employment and an open bank account. These types of loans are considered a common form of "fringe banking" and are generally marketed to consumers with spotty credit records and low incomes. The customer exchanges a personal check for cash minus a fee after signing a contract.

The Court found that without the availability of class-wide relief, no claims would be brought against McKenzie Check Advance and harmed consumers would not be able to otherwise retain competent counsel and that they would be effectively denied any remedy for the Defendants' alleged breaches of Florida's criminal usury laws. "We are determined to do what it takes to bring these cases to a successful conclusion and to insure that consumers get the justice they deserve. Consumers are being taken advantage of daily by these services and the Court has allowed us to move forward today in our work as advocates for consumer justice. This is a banner day for all consumers, especially those that are forced in extenuating circumstances to turn to these type businesses," Mr. Leopold concluded.

Ted Leopold is Managing Partner in the law firm of Ricci~Leopold, P.A. As consumer justice advocates, the attorneys at Ricci~Leopold pursue justice for those who are harmed by the misconduct of insurance companies and corporations. The firm, founded in 1982, has six attorneys, and is headquartered in Palm Beach Gardens, Florida, with offices located at 2925 PGA Boulevard, Suite 200, Palm Beach Gardens, FL 33410. Additional information about Ricci~Leopold, P.A. may be obtained from the firms website at www.riccilaw.com or call (561) 684-6500.