In a case we filed in the Eastern District, NY on Friday, September 14, 2012, the complaint alleges that "CK Marketing, Inc." essentially operated as a guise to enforce and collect on a usurious payday loan created by the business, "Payday Online."
Most payday loans are usurious. Usury is illegal. New York has a private cause of action for civil usury. New York further criminalizes taking interest on loans that exceed 25% per year.
In this case, CK Marketing had taken directly from our client's bank account approximately $11,000 on a "loan" of $400 with an agreed-upon finance charge of only $120. CK Marketing operates out of Arizona. No matter which way you view the transaction, we argue, it was blatantly usurious and illegal under the laws of both New York and Arizona.
To add insult to injury, employees of CK Marketing have been harassed our client relentlessly for three years by phone, text, and email making false legal threats using words like "garnishments," "federal courts," and "legal teams." It is believed that this company never has – not has the authority to – commence legal action in the state of New York. False legal threats are strictly prohibited under the Fair Debt Collection Practices Act ("FDCPA"). We argue that CK Marketing is subject to the FDCPA as it is a third party collecting on an allegedly defaulted debt and/or falls under the "false name exception" because "CK Marketing" is not the same name as "Payday Online" and therefore appears to be a third party.
When our client discovered the unauthorized withdrawals, she caused her bank to block the repeated the $120 withdrawals. CK Marketing then attempted to instead make $100 withdrawals thereby crossing the line into blatant fraud and violations of the Electronic Funds Transfer Act.
CK Marketing, its chief executive, and five of its abusive collectors will now face our allegations in a New York federal court.