Arkansas Attorney General Dustin McDaniel sued a pair of companies and their owner last week for allegedly marketing illegal payday loans online to consumers in the state.
The suit names Arrowhead Investments Inc., Galaxy Marketing Inc. and Christopher Hodes.
The attorney general said contracts that Arkansas consumers provided to his office indicate the companies have loaned money to Arkansans at an interest rate of 782%. The lawsuit seeks to bar the defendants from offering or collecting upon high-interest loans in the state. It also seeks to cancel all such loan agreements and have all payments returned to borrowers.
In 2008, McDaniel's office demanded payday lenders cease operations in Arkansas. A state Supreme Court opinion concluded the operations violated Arkansas usury law.
“With the closure of more than 250 payday lending locations in Arkansas, the state’s consumers have saved millions of dollars in illegal interest payments,” McDaniel said in a statement. “I will not retreat from my pledge to eliminate all payday lending, whether it occurs at a storefront in Arkansas or over the Internet.”
Arrowhead Investments Inc. lists a Utah-based headquarters. An automated call center picked up a call to a toll-free number seeking comment about the suit.