Rio Resources Letter--I actually got a refund from this one!
Date: Thu, 03/16/2006 - 13:36
[quote]
To Whom It May Concern:
As of today February 10, 2006 I do not authorize you ########.
Your company is guilty of breaking The State of Michigan criminal usury laws.
CRIMINAL USURY (EXCERPT)
Act 259 of 1968
438.41 Criminal usury; definition; penalty.
Sec. 1.
A person is guilty of criminal usury when, not being authorized or permitted by law to do so, he knowingly charges, takes or receives any money or other property as interest on the loan or forbearance of any money or other property, at a rate exceeding 25% at simple interest per annum or the equivalent rate for a longer or shorter period. Any person guilty of criminal usury may be imprisoned for a term not to exceed 5 years or fined not more than $10,000.00, or both.
History: 1968, Act 259, Eff. Nov. 15, 1968
CRIMINAL USURY (EXCERPT)
Act 259 of 1968
438.42 Usurious loan records; possession, penalty.
Sec. 2.
A person is guilty of possession of usurious loan records when, with knowledge of the contents thereof, he possesses any writing, paper, instrument or article used to record criminally usurious transactions prohibited by this act. Any person guilty of possession of usurious loan records may be imprisoned for a term not to exceed 1 year or fined not more than $1,000.00, or both.
History: 1968, Act 259, Eff. Nov. 15, 1968
Your claim that the contract that I signed is only governed by New Mexico law is unsubstantiated. There is specific case law that refutes your claim. Your company solicited, accepted and transacted business with a citizen of the State of Michigan, thus you are subject to the laws of this state including the usury laws.
“Dot Com repeatedly and consciously chose to process Pennsylvania residents' applications and to assign them passwords. Dot Com knew that the result of these contracts would be the transmission of electronic messages into Pennsylvania. The transmission of these files was entirely within its control. Dot Com cannot maintain that these contracts are "fortuitous" or "coincidental" within the meaning of World-Wide Volkswagen. When a defendant makes a conscious choice to conduct business with the residents of a forum state, "it has clear notice that it is subject to suit there." World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567. Dot Com was under no obligation to sell its services to Pennsylvania residents. It freely chose to do so, presumably in order to profit from those transactions. If a corporation determines that the risk of being subject to personal jurisdiction in a particular forum is too great, it can choose to sever its connection to the state. Id. If Dot Com had not wanted to be amenable to jurisdiction in Pennsylvania, the solution would have been simple--it could have chosen not to sell its services to Pennsylvania residents.†(W.D.Pa. 1997)
As I am sure you are aware that even the State of New Mexico realizes that your practices are unfair, as on February 15, you will no longer be able to conduct business in the manner that you now do.
12.2.10.8 UNFAIR OR DECEPTIVE TRADE PRACTICES:
A. It is an unfair or deceptive trade practice for a small loan lender to offer or make a small loan that is not based upon reasonable underwriting guidelines, such as the borrower's income, or when the lender knows or should know with the exercise of reasonable diligence that the loan is beyond the borrower's reasonable ability to repay according to the terms of the loan. For the purposes of this rule, there shall be a rebuttable presumption that the borrower has a reasonable ability to repay the loan if the loan amount does not exceed 25% of the borrower's net monthly income.
B. It is an unfair or deceptive trade practice for a small loan lender to rely solely on the loan-to-value ratio in extending a loan to a borrower.
C. It is an unfair or deceptive trade practice for a small loan lender to misrepresent that a borrower meets the lender's underwriting guidelines for a particular loan or to misrepresent that particular guidelines are being used when the borrower does not meet the lender's underwriting guidelines or when such guidelines do not exist.
D. It is an unfair or deceptive trade practice for a small loan lender to make a small loan without providing the consumer a reasonable period of time to repay the loan. For the purposes of this rule, there shall be a rebuttable presumption that this standard is met if the loan does not require that it be repaid in full for at least four months, provided there is no prepayment penalty if the loan is paid off sooner.
E. It is an unfair or deceptive trade practice for a small loan lender to make a small loan with the knowledge that the borrower is likely to be unable to repay the loan, or to make the loan with the reasonable expectation of seizing the borrower's collateral.
F. It is an unfair or deceptive trade practice for a small loan lender to falsify, or encourage any prospective borrower to falsify, the borrower's credit application for a payday or car title loan.
G. It is an unfair or deceptive trade practice for a small loan lender to fail to clearly and conspicuously disclose orally and in writing a payday or car title loan's fees, charges, and payments.
H. It is an unfair or deceptive trade practice for a small loan lender to engage in an act or practice in connection with the offering of a small loan, where the borrower exclusively or primarily uses the proceeds of the small loan to re-pay another small loan.
I. It is an unfair or deceptive trade practice to require the purchase of credit insurance or an auto club membership as a condition to the making of any small loan by a small loan lender.
J. It is an unfair or deceptive trade practice for a small loan application form of the licensee to be preprinted to offer or provide financing for the purchase of credit insurance or auto club memberships. Any agreement to purchase credit insurance or auto club membership shall be separate from any small loan agreement, and must provide a disclosure which is either signed or initialed by the consumer acknowledging that he/she understands that the purchase of the credit insurance or auto club membership was in no way a condition or requirement for obtaining any loan from the small loan lender.
K. It is an unfair or deceptive trade practice for a small loan lender to submit a check received for payment of a small loan for deposit more than one time, or to create electronic checks for deposit and deposit such electronic checks or electronically debit the borrower's checking account after a check or electronic debit has been dishonored or returned for insufficient funds.
L. It is an unfair or deceptive trade practice for a small loan lender to charge application, document preparation, credit check or any fees other than a reasonable returned check or declined debit authorization charge.
M. It is an unfair or deceptive trade practice for a small loan lender to require payment of interest charges for the full term of the small loan if the small loan is paid off early.
N. It is an unfair or deceptive trade practice for a small loan licensee to require small loan terms that provide for payments against interest only. Payments on small loans shall include both interest and principal during the term of the small loan.
O. It is an unfair or deceptive trade practice to allocate payments during the term of the small loan so that a balloon payment is due at the last scheduled payment of the loan, i.e., payments against the principal balance of the loan shall be equally divided during the term of the loan.
[12.2.10.8 NMAC - N, 02/15/2006]
12.2.10.9 UNCONSCIONABLE TRADE PRACTICES:
A. It is an unconscionable trade practice for a small loan lender to engage in an act or practice in connection with the offering of a small loan which shocks the conscience or is exceedingly unfair, harsh or callous, such as when, given the circumstances, the terms of the loan place the borrower with a substantial and unreasonable risk of loss of the collateral while the lender assumes little or no risk of loss.
B. It is an unconscionable trade practice for a small loan lender to engage in an act or practice in connection with the offering of a small loan where the lender intentionally makes a loan for the purpose of seizing the borrower's collateral.
C. It is an unconscionable trade practice for a small loan lender to engage in an act or practice in connection with the offering of a small loan that takes unreasonable advantage of the small loan lender's superior knowledge and expertise or when there is no legitimate business justification for such a small loan and the lender knows that the borrower is especially vulnerable or is facing an emergency need for the small loan.
D. It is an unconscionable trade practice for a small loan lender to engage in an act or practice in connection with the offering of a small loan that takes unfair advantage of the borrower's relative education,
language skills, advancing age, clear inability to handle monies, or other factors that place the borrower at an unreasonable disadvantage.
E. It is an unconscionable trade practice for a small loan lender to engage in an act or practice in connection with the offering of a small loan that charges interest or other credit costs that are significantly excessive in comparison to other available loans, regardless of whether the interest and cost charges of the loan are otherwise lawful under state or federal credit statutes.
F. It is an unconscionable trade practice for a small loan lender to offer or make a payday or car title loan and:
(1) charge more than seven dollars fifty cents ($7.50) or ten percent of the amount loaned, whichever is greater, for the first thirty-day period of the loan; this charge shall not be made on the refinancing of an existing loan or credit transaction; a loan or extension of credit shall be considered to be refinancing of an existing loan if any part of the proceeds of the subsequent loan is applied toward the payment of a prior loan with the same small loan lender;
(2) for the remaining period of the payday or car title loan, including any refinancing, to charge directly, indirectly or by any subterfuge, a small loan charge in connection with any payday or car title loan transaction at a rate in excess of four percent per month on the unpaid principal balance of the loan or extension of credit; this shall be limited to a period of 12 months from the date of maturity of the loan; in total, this cap on interest equates to an average rate of 54% per annum: ten percent for the first month, followed by four percent for the subsequent eleven months; and
(3) to charge a rate in excess of ten percent per annum after twelve months from the date of maturity of the loan;
(4) the foregoing payday and car title loan charges are limiting maximums and nothing in this rule shall be construed to prohibit a small loan lender from contracting for or receiving a lesser rate.
G. It is an unconscionable trade practice for a small loan lender to require borrowers to waive the right to participate in a class action or jury trial, to seek punitive damages, to require waiver or release of pre-existing claims or causes of action arising from prior transactions, or avail themselves of any other form of legal redress.
H. It is an unconscionable trade practice for a small loan lender to fail to provide written translation of documents in the language in which solicitation(s) have been made or in which the transaction took place, or to fail to provide written verification that a full and complete oral translation of the contract was provided to the borrower for any transaction that took place in an oral (non-written) language.
[12.2.10.9 NMAC - N, 02/15/2006]
We have received your correspondence regarding your complaint with our company. It appears as though you have misunderstood the terms of your loan agreement.
While the information that you have collected may apply to companies that have locations in your state, it does not apply to Internet Lenders. We do not have a physical location (office) in your state, therefore the same restrictions do not apply to us. This is based on sound advice from our legal department.
We lent you money in good faith, with the understanding that you would abide by the terms detailed on your loan contract. We upheld our end of the agreement by crediting the funds to your account, and had good faith that you would uphold your end of the agreement in return.
While we believe that all terms and conditions of the loan agreement have been met on our end, it has always been our policy to make sure that the customer is happy and completely satisfied with our services. For this reason, we are refunding your full finance charge on your loan to you since you believe it to be unfair.
It has been a pleasure doing business with you. Your account will be marked “Paid In Full†and the Lender will be prepared to send you a refund check in the amount of $60.00, which is the difference between the $360.00 that you have paid and the original $300.00 loan amount. We expect this offer will bring us to an amicable resolution.
Please acknowledge your understanding and acceptance of our proposal if you are in agreement with the offer detailed above. Once your acknowledgement/agreement is received, we will expedite the issuance and mailing of your refund check to the mailing address listed above.
Thank you for your time and consideration in this matter.
Respectfully,
Compliance Department
I understand and accept that Rio Resources will be issuing and mailing a refund check for $60.00 to me, (my name). I also understand that you will be mailing this check to (my address). I understand that my account will be marked Paid in Full, thus there will be no further debits taken out of my checking account from Rio Resources.
Would you kindly share this with the recovery deparment.
Thank you.,
[/quote]
To Whom It May Concern:
As of today February 10, 2006 I do not authorize you ########.
Your company is guilty of breaking The State of Michigan criminal usury laws.
CRIMINAL USURY (EXCERPT)
Act 259 of 1968
438.41 Criminal usury; definition; penalty.
Sec. 1.
A person is guilty of criminal usury when, not being authorized or permitted by law to do so, he knowingly charges, takes or receives any money or other property as interest on the loan or forbearance of any money or other property, at a rate exceeding 25% at simple interest per annum or the equivalent rate for a longer or shorter period. Any person guilty of criminal usury may be imprisoned for a term not to exceed 5 years or fined not more than $10,000.00, or both.
History: 1968, Act 259, Eff. Nov. 15, 1968
CRIMINAL USURY (EXCERPT)
Act 259 of 1968
438.42 Usurious loan records; possession, penalty.
Sec. 2.
A person is guilty of possession of usurious loan records when, with knowledge of the contents thereof, he possesses any writing, paper, instrument or article used to record criminally usurious transactions prohibited by this act. Any person guilty of possession of usurious loan records may be imprisoned for a term not to exceed 1 year or fined not more than $1,000.00, or both.
History: 1968, Act 259, Eff. Nov. 15, 1968
Your claim that the contract that I signed is only governed by New Mexico law is unsubstantiated. There is specific case law that refutes your claim. Your company solicited, accepted and transacted business with a citizen of the State of Michigan, thus you are subject to the laws of this state including the usury laws.
“Dot Com repeatedly and consciously chose to process Pennsylvania residents' applications and to assign them passwords. Dot Com knew that the result of these contracts would be the transmission of electronic messages into Pennsylvania. The transmission of these files was entirely within its control. Dot Com cannot maintain that these contracts are "fortuitous" or "coincidental" within the meaning of World-Wide Volkswagen. When a defendant makes a conscious choice to conduct business with the residents of a forum state, "it has clear notice that it is subject to suit there." World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567. Dot Com was under no obligation to sell its services to Pennsylvania residents. It freely chose to do so, presumably in order to profit from those transactions. If a corporation determines that the risk of being subject to personal jurisdiction in a particular forum is too great, it can choose to sever its connection to the state. Id. If Dot Com had not wanted to be amenable to jurisdiction in Pennsylvania, the solution would have been simple--it could have chosen not to sell its services to Pennsylvania residents.†(W.D.Pa. 1997)
As I am sure you are aware that even the State of New Mexico realizes that your practices are unfair, as on February 15, you will no longer be able to conduct business in the manner that you now do.
12.2.10.8 UNFAIR OR DECEPTIVE TRADE PRACTICES:
A. It is an unfair or deceptive trade practice for a small loan lender to offer or make a small loan that is not based upon reasonable underwriting guidelines, such as the borrower's income, or when the lender knows or should know with the exercise of reasonable diligence that the loan is beyond the borrower's reasonable ability to repay according to the terms of the loan. For the purposes of this rule, there shall be a rebuttable presumption that the borrower has a reasonable ability to repay the loan if the loan amount does not exceed 25% of the borrower's net monthly income.
B. It is an unfair or deceptive trade practice for a small loan lender to rely solely on the loan-to-value ratio in extending a loan to a borrower.
C. It is an unfair or deceptive trade practice for a small loan lender to misrepresent that a borrower meets the lender's underwriting guidelines for a particular loan or to misrepresent that particular guidelines are being used when the borrower does not meet the lender's underwriting guidelines or when such guidelines do not exist.
D. It is an unfair or deceptive trade practice for a small loan lender to make a small loan without providing the consumer a reasonable period of time to repay the loan. For the purposes of this rule, there shall be a rebuttable presumption that this standard is met if the loan does not require that it be repaid in full for at least four months, provided there is no prepayment penalty if the loan is paid off sooner.
E. It is an unfair or deceptive trade practice for a small loan lender to make a small loan with the knowledge that the borrower is likely to be unable to repay the loan, or to make the loan with the reasonable expectation of seizing the borrower's collateral.
F. It is an unfair or deceptive trade practice for a small loan lender to falsify, or encourage any prospective borrower to falsify, the borrower's credit application for a payday or car title loan.
G. It is an unfair or deceptive trade practice for a small loan lender to fail to clearly and conspicuously disclose orally and in writing a payday or car title loan's fees, charges, and payments.
H. It is an unfair or deceptive trade practice for a small loan lender to engage in an act or practice in connection with the offering of a small loan, where the borrower exclusively or primarily uses the proceeds of the small loan to re-pay another small loan.
I. It is an unfair or deceptive trade practice to require the purchase of credit insurance or an auto club membership as a condition to the making of any small loan by a small loan lender.
J. It is an unfair or deceptive trade practice for a small loan application form of the licensee to be preprinted to offer or provide financing for the purchase of credit insurance or auto club memberships. Any agreement to purchase credit insurance or auto club membership shall be separate from any small loan agreement, and must provide a disclosure which is either signed or initialed by the consumer acknowledging that he/she understands that the purchase of the credit insurance or auto club membership was in no way a condition or requirement for obtaining any loan from the small loan lender.
K. It is an unfair or deceptive trade practice for a small loan lender to submit a check received for payment of a small loan for deposit more than one time, or to create electronic checks for deposit and deposit such electronic checks or electronically debit the borrower's checking account after a check or electronic debit has been dishonored or returned for insufficient funds.
L. It is an unfair or deceptive trade practice for a small loan lender to charge application, document preparation, credit check or any fees other than a reasonable returned check or declined debit authorization charge.
M. It is an unfair or deceptive trade practice for a small loan lender to require payment of interest charges for the full term of the small loan if the small loan is paid off early.
N. It is an unfair or deceptive trade practice for a small loan licensee to require small loan terms that provide for payments against interest only. Payments on small loans shall include both interest and principal during the term of the small loan.
O. It is an unfair or deceptive trade practice to allocate payments during the term of the small loan so that a balloon payment is due at the last scheduled payment of the loan, i.e., payments against the principal balance of the loan shall be equally divided during the term of the loan.
[12.2.10.8 NMAC - N, 02/15/2006]
12.2.10.9 UNCONSCIONABLE TRADE PRACTICES:
A. It is an unconscionable trade practice for a small loan lender to engage in an act or practice in connection with the offering of a small loan which shocks the conscience or is exceedingly unfair, harsh or callous, such as when, given the circumstances, the terms of the loan place the borrower with a substantial and unreasonable risk of loss of the collateral while the lender assumes little or no risk of loss.
B. It is an unconscionable trade practice for a small loan lender to engage in an act or practice in connection with the offering of a small loan where the lender intentionally makes a loan for the purpose of seizing the borrower's collateral.
C. It is an unconscionable trade practice for a small loan lender to engage in an act or practice in connection with the offering of a small loan that takes unreasonable advantage of the small loan lender's superior knowledge and expertise or when there is no legitimate business justification for such a small loan and the lender knows that the borrower is especially vulnerable or is facing an emergency need for the small loan.
D. It is an unconscionable trade practice for a small loan lender to engage in an act or practice in connection with the offering of a small loan that takes unfair advantage of the borrower's relative education,
language skills, advancing age, clear inability to handle monies, or other factors that place the borrower at an unreasonable disadvantage.
E. It is an unconscionable trade practice for a small loan lender to engage in an act or practice in connection with the offering of a small loan that charges interest or other credit costs that are significantly excessive in comparison to other available loans, regardless of whether the interest and cost charges of the loan are otherwise lawful under state or federal credit statutes.
F. It is an unconscionable trade practice for a small loan lender to offer or make a payday or car title loan and:
(1) charge more than seven dollars fifty cents ($7.50) or ten percent of the amount loaned, whichever is greater, for the first thirty-day period of the loan; this charge shall not be made on the refinancing of an existing loan or credit transaction; a loan or extension of credit shall be considered to be refinancing of an existing loan if any part of the proceeds of the subsequent loan is applied toward the payment of a prior loan with the same small loan lender;
(2) for the remaining period of the payday or car title loan, including any refinancing, to charge directly, indirectly or by any subterfuge, a small loan charge in connection with any payday or car title loan transaction at a rate in excess of four percent per month on the unpaid principal balance of the loan or extension of credit; this shall be limited to a period of 12 months from the date of maturity of the loan; in total, this cap on interest equates to an average rate of 54% per annum: ten percent for the first month, followed by four percent for the subsequent eleven months; and
(3) to charge a rate in excess of ten percent per annum after twelve months from the date of maturity of the loan;
(4) the foregoing payday and car title loan charges are limiting maximums and nothing in this rule shall be construed to prohibit a small loan lender from contracting for or receiving a lesser rate.
G. It is an unconscionable trade practice for a small loan lender to require borrowers to waive the right to participate in a class action or jury trial, to seek punitive damages, to require waiver or release of pre-existing claims or causes of action arising from prior transactions, or avail themselves of any other form of legal redress.
H. It is an unconscionable trade practice for a small loan lender to fail to provide written translation of documents in the language in which solicitation(s) have been made or in which the transaction took place, or to fail to provide written verification that a full and complete oral translation of the contract was provided to the borrower for any transaction that took place in an oral (non-written) language.
[12.2.10.9 NMAC - N, 02/15/2006]
We have received your correspondence regarding your complaint with our company. It appears as though you have misunderstood the terms of your loan agreement.
While the information that you have collected may apply to companies that have locations in your state, it does not apply to Internet Lenders. We do not have a physical location (office) in your state, therefore the same restrictions do not apply to us. This is based on sound advice from our legal department.
We lent you money in good faith, with the understanding that you would abide by the terms detailed on your loan contract. We upheld our end of the agreement by crediting the funds to your account, and had good faith that you would uphold your end of the agreement in return.
While we believe that all terms and conditions of the loan agreement have been met on our end, it has always been our policy to make sure that the customer is happy and completely satisfied with our services. For this reason, we are refunding your full finance charge on your loan to you since you believe it to be unfair.
It has been a pleasure doing business with you. Your account will be marked “Paid In Full†and the Lender will be prepared to send you a refund check in the amount of $60.00, which is the difference between the $360.00 that you have paid and the original $300.00 loan amount. We expect this offer will bring us to an amicable resolution.
Please acknowledge your understanding and acceptance of our proposal if you are in agreement with the offer detailed above. Once your acknowledgement/agreement is received, we will expedite the issuance and mailing of your refund check to the mailing address listed above.
Thank you for your time and consideration in this matter.
Respectfully,
Compliance Department
I understand and accept that Rio Resources will be issuing and mailing a refund check for $60.00 to me, (my name). I also understand that you will be mailing this check to (my address). I understand that my account will be marked Paid in Full, thus there will be no further debits taken out of my checking account from Rio Resources.
Would you kindly share this with the recovery deparment.
Thank you.,
[/quote]
