Cash America International, Inc. CSH announced today a voluntary
program to fully reimburse approximately 14,000 Ohio customers for funds
collected in connection with legal proceedings initiated by the Company in
Ohio from January 1, 2008 to the present seeking the collection of past due
loan amounts owed to the Company.
Cash America recently determined that a small number of employees did not
prepare some court documents properly in many of its Ohio collections legal
proceedings. While the Company believes the filed documents accurately depict
the existence and amount of the debts owed to the Company under consumer
lending contracts, the preparation and filing of these documents did not
always comply with certain court rules.
Cash America will voluntarily reimburse all amounts received through
collections legal proceedings initiated by the Company in Ohio, from January
1, 2008 to the present, plus interest, including the reimbursement of amounts
collected in connection with legal proceedings that were not affected by the
improper document preparation. The Company is engaging an independent claims
administrator to conduct the reimbursement program and to ensure the most
comprehensive reimbursement possible. In addition, for all trial court
collections proceedings filed in Ohio since January 1, 2008 with the exception
of one appellate matter, Cash America will promptly file dismissals, terminate
all existing post-judgment collections activities, and request to vacate each
judgment entered and/or notify credit reporting bureaus of the vacated
judgments, as necessary for each case. While Cash America is taking these
actions proactively, it could still be subject to other liabilities, and
additional changes in its business practices may also be required.
Cash America has voluntarily disclosed this issue and its intent to implement
the reimbursement program to state and federal regulators and will continue to
keep regulators informed on the progress of the program and the other measures
it will take in connection with this issue.
Cash America estimates that the cost of this reimbursement program and related
expenses will be approximately $13.4 million before taxes, which will be
included in the financial results for its fourth quarter ended December 31,
2012.
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