Press Release

September 25, 2017

Contact: Richard Loconte, 212-709-1691


Total Account Recovery and E-Finance Call Center Support to Pay $45,000 Penalty for Servicing and Collecting on Illegal Payday Loans in New York

Financial Services Superintendent Maria T. Vullo today announced that the Department of Financial Services (DFS) has entered into a consent order with Total Account Recovery, LLC (TAR), a payday loan debt collector, and E-Finance Call Center Support (doing business as E-Finance), a payday loan servicer.  The settlement announced today provides for nearly $12 million in loan forgiveness for New York consumers and that the companies will cease activities in New York.  E-Finance serviced and TAR collected on illegal payday loans made to New York consumers.  Payday loans, which are small dollar loans typically structured as an advance on a borrower’s next paycheck, are illegal in New York.

“Payday lending is illegal in New York, and DFS will not tolerate predatory actors in our communities.  Debt collectors like TAR, who collect or attempt to collect outstanding payments from New Yorkers on payday loans violate debt collection laws, and will be met with swift action,” said Financial Services Superintendent Vullo.  “A payday loan servicer like E-Finance makes unlawful misrepresentations to New Yorkers when it sends notices of payments due and negotiates payment agreements with New York consumers for payday loan payments that are not legally owed under New York law.  DFS will continue to take aggressive action to protect New Yorkers and send a clear message to those who attempt to profit from illegal payday loan activity.”

TAR will discharge more than $11.8 million in New York consumers’ payday loan debts. The fees charged on payday loans, when annualized, generally carry an interest rate many times greater than New York’s civil and criminal usury limits, which are 16 percent and 25 percent, respectively. Today’s settlement represents significant relief to consumers who have been targeted by predatory payday loans with punishing interest rates.

DFS’s investigation discovered that TAR engaged in unlawful debt collection practices when it attempted to collect on more than 20,000 payday loan debts of New York State consumers and collected payments on 2,119 of those debts between 2011 and 2014.  The DFS investigation also found that E-Finance made intentional representations when it attempted to negotiate payments with New York consumers and collected payments on illegal payday loan debt from New York consumers.  Both TAR and E-Finance repeatedly called consumers at home and at work, and sometimes threatened consumers to pressure them to pay their alleged payday loan debts.

As part of the settlement, TAR has ceased all collection on payday loans in New York and will:

  • Discharge all debt connected with the New York payday loan accounts it currently holds;
  • Move to vacate any judgments TAR obtained on New Yorkers’ payday loan accounts;
  • Release any pending garnishments, levies, liens, restraining notices, or attachments relating to any judgments on New Yorkers’ payday loan accounts.

As part of the settlement, E-Finance will close any pending New York accounts and cease any communications with New York consumers regarding such accounts.

The TAR/E-Finance settlement covers all consumers in New York State who had payday loan accounts that TAR collected on or attempted to collect on from 2011 to 2014.  Letters notifying New York consumers of the settlement will be sent by TAR and E-Finance by November 2017.

Consumers with questions about this settlement are encouraged to contact the DFS Consumer Hotline at (800) 342-3736 or at [email protected].

A copy of the TAR/E-Finance consent order can be found here.