Mary Brown (not her real name) is a divorced woman with 3 grown children and 2 grandchildren who lives in Berea. She quit high school in the 12th grade and later got her GED. She has worked in a factory, as a housekeeper, cutting tobacco and at Wendy’s. She has serious back problems resulting from several accidents. She also suffers from post-traumatic stress syndrome, a bi-polar condition and panic attacks. She has received treatment for her panic attacks and had learned how to avoid having attacks. Ms. Brown began receiving Social Security Supplemental Income (“SSI”) in 1996 for her disabilities.
Ms. Brown was involved in a continuous series of payday loans with Cash Express from April 2005 through August 2006. During the time Ms. Brown was dealing with Cash Express, her SSI varied from $402 to $603 per month. Her first transaction with Cash Express occurred on April 1, 2005 when she borrowed $200. When payment was due on the first loan, Ms. Brown borrowed the money from family members to repay it in cash, and immediately wrote another check so she could pay her bills for the coming month. Ms. Brown had a series of payday loans with Cash Express that followed the same pattern.
Between April 2005 and August 2006, the amount of the checks increased from $203 to $500 ($435 cash, $65 fee). When Ms. Brown first went to Cash Express, she was told that, based on her income, the maximum she qualified for was $200. The annual percentage rate (APR) on most of Ms. Brown’s loans with Cash Express was 182.50% and she had 30 days to pay because she only received a monthly check.
Ms. Brown never simply paid off a check and walked away. She could never get away from them, always had to rewrite. Every month, when she got her Social Security check, Cash Express was the first place she went. She would have to buy back the check, but would have to immediately re-write another check so she could pay her bills for the coming month.
During the time she was dealing with Cash Express, Ms. Brown was a nervous wreck about paying her bills. She had more trouble dealing with her basic expenses during this time, partly because she was paying fees to Cash Express every month of up to $65. Between April 2005 and December 2006, her panic attacks increased to about once a week. In August 2006, Ms. Brown realized she was over her head and couldn’t repay Cash Express. In December 2006, Ms. Brown called the Cash Express manager, and asked if she could pay off what she owed at $25 per month. According to Ms. Brown, the manager agreed to this on the phone, but Cash Express disputes this. Ms. Brown went into Cash Express on December 29, 2006 to cash her $415.34 Social Security check and to pay Cash Express the first $25. The Cash Express employee took her Social Security check and then refused to give Ms. Brown any of the proceeds of the check.
When Cash Express took her Social Security check, Ms. Brown had a panic attack and begged Cash Express to return her money as this was the only income she had for the month. Ms. Brown was told to leave or they would call the law. There were 8 to 10 people in line who witnessed this, and she was humiliated. Ms. Brown went home, but it took her months before she could go out of the house. She had welts from the anxiety, couldn’t eat, lost weight and had other medical problems. She wasn’t able to pay her car insurance and other bills.
When Ms. Brown started dealing with Cash Express, she was living with her daughter in a Section 8 subsidized house. Partly due to the fees she was paying Cash Express every month, Ms. Brown got behind in her rent and was evicted in September 2006. After that, she lost her Section 8 subsidy benefits. She had to move back home with her parents. She had to put all her furniture and belongings in storage, where she is still incurring fees of $75 per month, and cannot get her things back until this is paid.
Ms. Brown filed a complaint against Cash Express in arbitration. The agreement she signed with Cash Express required that all disputes be resolved in mandatory arbitration. She argued that the continuous series of loans with Cash Express were really just rollovers of the same loan and were illegal under Kentucky law. The arbitrator found that this practice was legal. Ms. Brown also argued that Cash Express’ seizure of her Social Security check was a violation of federal law, which exempts Social Security from attachment and garnishment. The arbitrator agreed with Ms. Brown on this claim, and ordered Cash Express to refund her Social Security check, but did not award her any damages.