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Summit Group LLC

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kyle_soule

Junior Member
This question pertains to Illinois law.

Payday Loan company Summit Group LLC gave me a loan on 8/9/10 for 250 dollars. Verification of confirmation email was received stating that an agent would contact me shortly. A few minutes after verification receipt, an agent from Summit Group LLC contacted me regarding the loan. She stated that 250 dollars was the amount of the loan and that I would be charged 75 dollars every 2 weeks or I could pay in full at any time. She also stated, as did the verification email, that another email would be sent with the full terms of the loan.

Three months later, 11/2/10, I received my first communication since the telephone call setting up the loan stating that I owe 325 dollars or I could continue to make 75 dollar "refinance fees" and pay in full at the time of my choosing. Since the loan was set up, I have paid 450 dollars with the understanding that these fees were going towards the loan costs, not simply going towards nothing at all.

The stated Annuel percentage Rate is 782.14%. I have scheduled this loan to be paid in full (325 dollars total which ignores the 450 already paid) on 11/5 to avoid further fees. The customer service will not provide me with any additional information outside of an email address, phone number, and fax number.

Is this fair practice or would it serve me well to seek legal advice? I've signed nothing and have received nothing in the mail and this is only the first communication via email with terms in it. They claim they sent me one every single time they took out money; however, if they had, I'd have looked at it and saw this nonsense and paid it in full the first paycheck I received.
 


cosine

Senior Member
A "refinance fee" is the cost of taking out another 2 week loan to pay off the previous loan. You are not paying off your loan at all, apparently. This is part of the scam of payday loan companies.
 

kyle_soule

Junior Member
I put a stop on any further withdrawals from my account because they refused to provide my any information aside from "we explained it to you and have sent you many emails", neither of which are true and I can prove the latter. They wouldn't even provide me a physical address.

What should I expect at this point? They have received 450 dollars, which is more than enough, in my opinion, considering the original payoff amount is 325. Will I be turned into collections? When/if the collector comes, what kind of information should I request they provide to me?

Thanks so much for your response ^_^
 

cosine

Senior Member
If you still have a balance, interest is still accruing on that balance. In order to "put a stop to it" you have to pay off the entire balance, whatever that is at the time you pay it. As explained before, they were charging you the (excessive, but what you agreed to) $75 each period to RE-finance (e.g. extend) the loan. The balance AND its interest were extended into the next period ... and growing in the process.

I don't agree with the way they do business, or the fact that the law allows them to do it this way. But if you can't understand exactly what is happening to you, you are going to be facing far more problems in the near future. At this rate, you might as well start your bankruptcy paperwork. They are not going to just stop because you think "that is enough".

I don't think any of this is fair, but it is what you agreed to, even though you clearly didn't understand it. I'm sure most of their clients/victims don't understand it. You are caught in a trap. Just not paying doesn't disable the trap (if anything, it increases the tension on the trap).
 
You may not have gotten emails communicating the terms, but you DID state you received a phone call a few minutes after applying, and were TOLD the terms. Whether or not you received emails and whether you can prove they didn't send them is irrelevant. You admit you know the terms.

According to my calculations, you paid $450, but still owe, on or before November 15th, if that's when you choose to pay it off, the $325. Even though you made a payment on November 5 (your words), you would STILL owe another $325. The only way you would not owe more money is if you had paid in full before September 6, and you would have only had to pay $400.

You mentioned in your second paragraph that you were told the terms, which is $75 every 2 weeks (on TOP of your original loan). Did you think that the repayment terms were $75 every 2 weeks, and that you have paid the loan off, and that the $200 was the only interest? You state in your second post that the original payoff is $325 but then you state in your first post that you know it rolls over every 2 weeks. So your second post doesn't wash. You owe the money.
 
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