Chapter 9

Complaint against Payday Lender Disguising Its Loans as Sales of Internet Access (FL)

Lynn Drysdale has been a staff attorney with Jacksonville Area Legal Aid, Inc. for 16 years. Her focus is in the area of consumer finance and bankruptcy with an emphasis on asset preservation and community economic development , unfair and deceptive consumer practices, debt collection and other consumer concerns raised by low-income individuals. She is involved in litigation, legislative advocacy and community education. Ms. Drysdale is a 1985 graduate of the University of Florida College of Law. She is also a licensed mediator. This chapter is a class action complaint against a payday lender who was disguising its payday loans to avoid complying with consumer protection laws. Payday lending involves very expensive short term consumer loans that are payable at the consumers payday but often renewed at great cost.1 The payday lender allegedly disguised its loans as sales of internet access and of career training video tapes. The complaint alleges that the disguised loans violate the Florida usury laws, the Florida civil criminal practices act, the Truth in Lending Act,2 the Electronic Funds Transfer Act,3 the Forida collection practices act,4 and Florida UDAP .5 The compliant seeks declaratory and injunctive relief, actual damage, and attorney fees.

See National Consumer Law Center, Cost of Credit 7.5.5 (2d ed. 2000 and Supp.). See also, National Consumer Law Center, 3 Consumer Law Pleadings on CD-Rom 4.1 (1997). 2 See National Consumer Law Center, Truth in Lending 2.2.4.3.5 (5th ed. 2003). 3 See National Consumer Law Center, Consumer Banking and Payments Law 4.4. (2d ed. 2002). 4 See National Consumer Law Center, Fair Debt Collection Practices 11.2 (5th ed. 2004). 5 See National Consumer Law Center, Unfair and Deceptive Acts and Practices 3.2 (5th ed. 2001).

IN THE CIRCUIT COURT, FOURTH JUDICIAL CIRCUIT, IN AND FOR DUVAL COUNTY, FLORIDA CASE NO.: DIVISION:

[CONSUMER 1] and [CONSUMER 2], on behalf of themselves and those similarly situated, Plaintiffs, v. JOHN GILL, an individual, KIMBERLY DANIELS, an individual and JAG FL, LLC., a Florida corporation doing business as Florida Internet, Defendants.

CLASS REPRESENTATION COMPLAINT The Plaintiffs, [Consumer 1] and [Consumer 2], on behalf of themselves and others similarly situated, by and through their undersigned attorneys, sue the Defendants, Jag Fl, LLC, a Florida corporation doing business as Florida Internet Florida Internet (collectively referred to as Florida Internet), John Gill and Kimberly Daniels and allege: JURISDICTION 1. This is a class action lawsuit brought pursuant to the Florida Usury laws, the federal Truth in Lending Act, the federal Electronic Funds Transfer Act, the Florida Consumer Collection Practices Act and the Florida Deceptive and Unfair Trade Practices Act based upon Florida Internets loan scheme created in an effort to avoid Florida usury laws and to misled Florida consumer into signing its criminally usurious loans without the benefit of the federallymandated consumer credit disclosures. Defendants use a standardized, form, consumer loan contracts entitled Internet Computer Access Rebate Purchase Application and Contract in the subject transactions. The Defendants also use illegally extortionate practices in their attempts to collect these illegal loans. 2. The Plaintiffs are seeking class declaratory and injunctive relief (temporary and permanent), statutory and damages, in excess of $15,000.00, exclusive of interest, costs and attorneys fees. PARTIES 3. The Plaintiffs are consumers residing in Jacksonville, Duval County, Florida. 4. At all times relevant herein, Florida Internet was and is a Florida corporation doing business in Jacksonville, Duval County, Florida as a consumer lender.

5. The Defendant, John Gill, is an Alabama resident, residing at 402 Rive Oak Way, Phoenix City, Alabama who at all times material to this complaint was doing business in Jacksonville, Duval County, Florida though his business, Florida Internet. 6. The Defendant, Kimberly Daniels, is a Florida resident, residing at 81 Zoradyda Avenue , Apt. A, St. Augustine, Florida who at all times material to this complaint was doing business in Jacksonville, Duval County, Florida through Florida Internet. JURISDICTION AND VENUE 7. The Court has jurisdiction of the parties and the subject matter of this action. 8. Venue is proper in Duval County, Florida because the parties executed the contracts in Duval County and payments were due in Duval County, Florida. HOW DEFENDANTS LOAN SCHEME WORKS 9. The Defendants provide pay day loans to Florida consumers. In order to conceal the true nature of their loans and to illegally circumvent Floridas Usury Laws and pay day loan and federal cost of credit laws, Defendants attempted to disguise their loan transactions as transactions for the sale of Internet usage time and career training video tapes. 10. Florida Internets true business practice was to accept borrowers checks with knowledge that there are insufficient funds in the account to cover the amount of the checks, to advance money to the borrowers using the check and access to the borrowers checking account as collateral and to require repayment of the loan within two weeks. The loans short term is designed to allow borrowers to repay the loan with their next pay check. 11. Under the terms of its contracts, Internet usage time had to be by appointment during regular business hours which were subject to change and its customers never received the video tapes. Florida Internet was not equipped to provide free Internet usage time to the volume of consumers who entered into their pay day loan transactions. Rarely, if ever, does a borrower actually use this services as Internet access is provided all around town for free. Also, the computers at Florida Internet look as if they are not operable. 12. The loan contract describes the principal amount of loan as a rebate. Each rebate requires a payment every two weeks for an indefinite period of time. The payment required is in an amount equal to one-sixth of the rebate. 13. When a borrower contacts Florida Internet for a loan, they are told they have to bring in a pay stub and must have a bank account. 14. As a condition of the Internet usage time sale, borrowers are required to provide Florida Internet with a check marked VOID and often a check in the amount of the loan plus interest. They require a borrower to agree to allow Florida Internet to automatically deduct sums from his/her checking, saving or credit card account. 15. Florida Internet holds these checks until the loan falls due. On that day the borrower is required to come to the store to repay the loan with cash and to retrieve the checks. 16. If the borrower does not come in to pay off the loan, Florida Internet will require a interest only payment or will automatically debit the borrowers account for an amount equal to the entire loan or interest which has accrued for the month. When Florida Internet obtains the interest only payment, the loan is rolled over for the same length of time as the original loan. The principal will not be reduced by the monthly payments and additional fees are charged.

17. Florida Internet typically assesses a finance charge of $20.00 for every $100.00 the customer borrows. 18. Florida Internet never provides the cost of credit disclosures required by the Federal Truth in Lending Act. 19. Florida Internet also violates 560.404, Fla. Stat. by failing to provide the statutorilyrequired grace period and by allowing borrowers to roll over their loans by paying off one loan with a higher, more expensive loan. Instead of allowing the grace period, Florida Internet illegally threatens criminal prosecution if a borrower does not make a bi-weekly payment. 20. In June, 1998, Defendant, John Gill signed a settlement agreement with the State of Florida in which he agreed to a permanent injunction prohibiting Mr. Gill and Florida Catalogue Sales, Inc., the predecessor in interest, and any of their agents, officers or employees from engaging in the business of catalogue sales, or engaging in any business by which they charge, take or receive any money in connection with any extension of credit in violation of Florida Usury laws. THE PLAINTIFFS TRANSACTION 21. Plaintiffs contacted Florida Internet to get a loan. They were told they had to bring in a pay check stub and asked if they had a bank account. They were also required to bring a check. 22. When they arrived they were told how much they could borrow. [Consumer 1] borrowed $300.00 in return for a payment of at least $360.00 in two weeks or a payment of $60.00 every two weeks which would never reduce the principal of her loan. [Consumer 2] borrowed $400.00 in return for payment of at least $480.00 in two weeks or a payment of $80.00 every two weeks which would never reduce the principal of his loan. He was later required to borrow $600.00 more after Florida Internet wrongfully debited his account. The Plaintiffs loan documents are attached hereto as Composite Exhibit A and are by this reference incorporated herein. 23. Neither received a rebate or any audio visual career seminars in return for the loan. 24. As a condition of the loan, they were required to provide Florida Internet with a check marked VOID and often a check, in the amount of the loan, plus interest. Florida Internet required borrowers provide automatic access to their checking accounts. 25. When Plaintiffs were unable to repay the entire principal and interest just two weeks after the loan was obtained they had to pay the interest only or risk having the principal and interest automatically deducted from their accounts. When this amount was paid or debited it did not reduce the principal amount of the loan. 26. When Plaintiffs were late in their payments, Florida Internet illegally threatened them with criminal prosecution if payment was not forwarded immediately. 27. Florida Internets standardized, form loan contract did not provide the disclosures required by 560.404(22), Fla. Stat. 28. Further, in its loan transactions, Florida Internet assessed interest in the amount of 480% which is criminally usurious in excess of those allowed by 560.404(6), Fla. Stat. 29. Florida Internet also required Plaintiffs to provide additional security for their transaction in violation of 560.404(9), Fla. Stat. 30. Florida Internets contract contains provisions which require Plaintiffs to waive legal rights in violation of 560.404(22), Fla. Stat., fails to provide the costs of credit disclosures

required by the federal Truth in Lending Act, 15 U.S.C. 1601, et seq. and 560.404(13), Fla. Stat., did not contain the language required by 560.404(20), Fla. Stat. and did not contain information regarding the 60 day grace period afforded to Plaintiffs by 560.404(22), Fla. Stat. 31. Florida Internet allowed Plaintiffs loan to rollover in violation of 560.404(18) and (22), Fla. Stat. 32. Florida Internet is not registered to engage in pay day loan transactions as is required by 560.403, Fla. Stat. GENERAL CLASS REPRESENTATION ALLEGATIONS COMMON TO EACH CLAIM 33. Pursuant to Rule 1.220, Florida Rules of Civil Procedure, Plaintiffs bring this claim on behalf of a class defined as all persons who satisfy the following criteria: a. They entered into a standard, form consumer loan transaction with Defendants for a pay day loan in which they were assessed a finance charge or interest. b. Their claims are not barred by limitations. 34. The class is so numerous that joinder of all members is impractical. Florida Internet enters into hundreds of consumer pay day loan transactions each month. 35. There are questions of law and fact common to the class, which questions predominate over any questions affecting only individual members. The principal issues raised by this claim are: a. Whether Florida Internets uniform business practices and contract violate Florida usury laws; b. Whether Florida Internet engaged in engaged in a pattern of criminal activity or engaged in the illegal collected of illegal debts in violation of 772.103, Fla. Stat.; c. Whether Florida Internet violated the federal Truth-in-Lending Act in its standardized, form consumer loan transactions; d. Whether Florida Internets uniform business practices and standardized, form contracts violate the FDUTPA; e. Whether Florida Internets uniform business practices and standardized, form contracts violate the Florida Deferred Presentment Act; f. Whether Florida Internets uniform business practices and standardized, form contracts violate the federal Electronic Funds Transfer Act; g. Whether Florida Internets uniform collection practices violate the Florida Consumer Collection Practices Act; and h. The appropriate amount of statutory damages and other relief allowed. 36. The only individual questions concern the identification of the persons whose consumer rights have been violated by Florida Internets practices which are the subject of this complaint. This can be determined by ministerial examination of papers. 37. The Plaintiffs claims are typical of those of the class members. All are entitled to relief by virtue of Florida Internets violations of the consumer protection statutes which are raised in Plaintiffs complaint. 38. The Plaintiffs will fairly and adequately protect the interests of the class. They has retained counsel experienced in handling class actions and actions involving unlawful business

practices. Neither Plaintiffs nor their counsel have any interests which might cause them not to vigorously pursue this action. 39. Certification of a class under Rule 1.220 is appropriate, in that a class action is superior to other available methods for the fair and efficient adjudication of this controversy. The interests of the class members in individually controlling the prosecution and defense of separate actions is minimal, in that the class members are unlikely to be aware that their rights were violated and in that individual actions are uneconomical. Difficulties likely to be encountered in managing this class action are substantially less than are involved in other types of cases routinely certified as class actions. COUNT ONE: USURY 40. Plaintiffs bring this class action against Florida Internet, seeking statutory damages for its systematic and uniform violations of Florida usury law, 687.03 and 687.071, Fla.Stat., in its consumer loan transactions. Plaintiffs on behalf of themselves and on behalf of those similarly situated, allege: 41. This is an action for damages that exceed $15,000.00 and for declaratory relief. 42. Plaintiffs reallege the allegations contained above in paragraphs 1 through 39, and incorporate the same herein by reference. 43. Florida Internet entered into pay day loan contracts with Plaintiffs and others similarly situated in which it sought interest upon a loan or advance of money at a higher rate of interest than the 18% per annum simple interest. Therefore, this loan was usurious. 44. In fact, the rate of interest charged by Florida Internet was in excess of 45% per annum simple interest rendering the loan criminally usurious and void ab initio pursuant to 687.071(7), Fla. Stat. 45. Florida Internet was attempting to evade Floridas usury laws by couching the terms of the standardized, form pay day loan transactions as the sale of Internet usage time. This characterization was a subterfuge to hide the actual interest rates actually charged. 46. At all times material hereto, Florida Internet was not licensed to act nor was it properly acting under any of the loan parity licenses referenced in 687.12, Fla. Stat. 47. Florida Internet extended loans to Plaintiffs and others similarly situated which were criminally usurious within the definition of Fla. Stat. 687.071(2), (3) (2000) and which was an extortionate extension of credit pursuant to Fla. Stat. 687.071(1) (e) (2000) which provides: Extortionate extensions of credit means an extension of credit whereby it is the understanding of the creditor and the debtor at the time an extension of credit is made that delay in repayment or failure to make repayment could result in the use of violence or other criminal means to cause harm to the person, reputation, or property of any person. (Emphasis added). 48. Florida Internet engaged in a consumer loan transaction with Plaintiffs in which a criminally usurious interest rate was charged and charged interest in excess of the rate allowed by 560.404(6), Fla. Stat. 49. As a direct result of Florida Internets actions, Plaintiffs and others similarly situated have suffered and will continue to suffer damages.

50. Plaintiffs have retained Jacksonville Area Legal Aid, Inc. to represent them and and the members of the class in this matter. Jacksonville Area Legal Aid, Inc. is entitled to attorneys fees and reimbursement of its costs. WHEREFORE, Plaintiffs request this Court enter judgment against Florida Internet and to: A. Declare that Florida Internets loan transaction with Florida consumers who signed Internet usage contracts are rendered void ad initio; B. Award to Plaintiffs and others similarly situated compensatory and punitive damages; C. Award to Plaintiffs attorneys fees and costs; and D. Grant such other and proper relief as may be deemed fit and proper. COUNT TWO: CLASS ACTION CIVIL REMEDIES FOR CRIMINAL PRACTICES ACT 51. Plaintiffs bring this class action against Florida Internet, John Gill and Kimberly Daniels seeking statutory treble damages for its systematic and uniform violations of Florida usury law, 687.03 and 687.071, Fla.Stat., Florida Consumer Collection Practices Act. 52. Plaintiffs reallege the allegations contained in paragraphs 2 through 39, and incorporate the same by reference herein. 53. John Gill and Kimberly Daniels collectively through ownership and operation of Florida Internet engaged in a pattern of criminal activity by charging consumer criminally usurious interest rates in their consumer pay day loan transactions in violation of 772.103, Fla. Stat. 54. John Gill and Kimberly Daniels collectively through ownership and operation of Florida Internet engaged in the illegal collection of illegal debts in violation of 772.103, Fla. Stat. 55. Florida Internet, John Gill and Kimberly Daniels, with criminal intent, received proceeds derived, directly or indirectly, from a pattern of criminal activity and through the collection of unlawful debts and used or invested, directly or indirectly, such proceeds in the acquisition of title, rights, interest and equity in the establishment and operation of Florida Internet in violation of 772.103, Fla. Stat. 56. Plaintiffs and others similarly situated are being and have been assessed criminally usurious interest rates and are begin and have been denied and deprived by Defendants of their rights under Florida usury and deferred presentment laws. Plaintiffs are also being illegally harassed with threats of criminal prosecution if they do not make their payments timely. 57. As a proximate result of Defendants unlawful actions, Plaintiffs and others similarly situated continue to suffer the irreparable harm described above for which monetary compensation is inadequate as they are still being harassed for payment of this illegal loan and deprived of their statutorily provided grace period. 58. Plaintiffs have retained Jacksonville Area Legal Aid, Inc. to represent them and the members of the class in this matter. Jacksonville Area Legal Aid, Inc. is entitled to attorneys fees and reimbursement of its costs. WHEREFORE, Plaintiffs on behalf of themselves and others similarly situated request the Court to enter a judgment against John Gill, Kimberly Daniels and Florida Internet pursuant to 772.103 and 772.104, Fla. Stat. awarding statutory treble damages and attorneys fees as

provided by 772.104, Fla. Stat. and granting such other and further relief as may be deemed just and proper. COUNT THREE: CLASS ACTION DECLARATORY AND INJUNCTIVE RELIEF 59. This is an action for class declaratory and injunctive relief against Florida Internet. 60. Plaintiffs reallege the allegations contained in paragraphs 2 through 39, and incorporate the same by reference herein. 61. Plaintiffs contend Florida Internet is utilizing an Internet sales subterfuge to engage in criminally usurious loan transactions with Florida consumers, including Plaintiffs. Florida Internet also uses this loan scheme to avoid the statutory protections provided by Florida usury laws, the Florida Deferred Presentment Act, the Federal Truth in Lending Act and the Federal Electronic Funds Transfer Act. 62. Plaintiffs and others similarly situated are in doubt as to their rights and status as borrowers under the aforementioned laws as a result of Florida Internets deceptive loan contracts, its assessment of criminally usurious interest rates and its continued attempts to collect these sums illegally. 63. Plaintiffs and others similarly situated are being and have been assessed criminally usurious interest rates and are begin and have been denied and deprived by Florida Internet of their rights under Florida usury and deferred presentment laws, which constitutes irreparable harm to Plaintiffs and others similarly situated for the purposes of injunctive relief. Plaintiffs are also being illegally harassed with threats of criminal prosecution if they do not make their payments timely. 64. As a proximate result of Florida Internets unlawful actions, Plaintiffs and others similarly situated continue to suffer the irreparable harm described above for which monetary compensation is inadequate as they are still being harassed for payment of this illegal loan and deprived of their statutorily provided grace period. 65. There is a substantial likelihood that Plaintiffs will prevail on the merits of their complaint. 66. Plaintiffs have retained Jacksonville Area Legal Aid, Inc. to represent them and the members of the class in this matter. Jacksonville Area Legal Aid, Inc. is entitled to attorneys fees and reimbursement of its costs. WHEREFORE, Plaintiffs request the Court to declare Florida Internets loans to be criminally usurious and, therefore, void ab initio, enter a judgment pursuant to Chapter 86 Fla. Stat. , declaring Florida Internet has no further right to illegally collect these loans, and for all other relief to which Plaintiffs prove themselves and others similarly situated entitled including an award of reasonable attorney fees and costs in this action. COUNT FOUR: FEDERAL TRUTH IN LENDING ACT 67. Plaintiffs bring this class action claim against Florida Internet, seeking statutory damages for its systematic failure to provide accurate, material disclosures required by the federal Truth-in-Lending Act, 15 U.S.C. 1601, et seq. and implementing Federal Reserve Board Regulation Z, 12 C.F.R. part 226 in their consumer loan transaction. Plaintiffs, on behalf of themselves and behalf of those similarly situated, alleges:

68. In connection with Plaintiffs and others similarly situated standardized, form loan transactions, Florida Internet was required prepare and provide to consumers, who obtain credit subject to a finance charge, Truth in Lending disclosure statements according to standardized policies and procedures pursuant to the federal Truth in Lending Act, 15 U.S.C. 1601, et seq. (hereinafter TILA) and implementing Federal Reserve Board Regulation Z, 12 C.F.R. part 226. 69. On its standardized pay day loan contracts, Florida Internet has failed to provide clear and accurate Truth in Lending disclosures notifying persons of the material terms of their loan transactions including, but not limited to the amounts financed, interest rates, total of payments, payment schedules and finance charges. 70. Plaintiffs reallege the allegations contained in Paragraphs 2 through 39, and incorporate them by reference herein. 71. In connection with Plaintiffs and others similarly situated loan transactions they were required to sign a form, loan documents entitled Internet Computer Access Rebate Purchase Application and Contract. Copies of these standardized, form contract are attached hereto as Composite Exhibit A and are by this reference incorporated herein. 72. The loan transactions, of Plaintiffs and others similarly situated were extensions of credit by a creditor subject to a finance charge and, therefore, Florida Internet was required to comply with TILA. 73. Plaintiffs and others similarly situated are persons and consumers as these terms are defined by 15 U.S.C. 1602(d) and (h). 74. Florida Internet is a creditor as this term is defined by 15 U.S.C. 1602(f). 75. In Plaintiffs and others similarly situated transactions, Florida Internet was and is required to prepare and provide cost of credit disclosures as required by the federal Truth in Lending Act, 15 U.S.C. 1601, et seq. (hereinafter TILA) and implementing Federal Reserve Board Regulation Z, 12 C.F.R. part 226. 76. TILA was enacted for the purpose of assuring a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available and to avoid the uninformed use of credit. 15 U.S.C 1601(a). To achieve its remedial purpose, TILA must be liberally construed in favor of the consumer. Ford Motor Credit v. Milhollin, 444 U.S. 555, 559 (1980). 77. In its form, high-interest loan contract, Florida Internet failed to provide clear and accurate TILA disclosures notifying Plaintiffs and others similarly situated of the material terms of their loan transaction including, but not limited to the amounts financed, interest rates, total of payments, payment schedule and finance charges. In fact, Florida Internet did not provide any of the required TILA disclosures. 78. As a result, Plaintiffs and others similarly situated have been provided inaccurate and unclear information concerning the material terms of their high-interest loan secured by their checking account upon which to base their decisions to enter into the subject loans. 79. In its form, loan contract, Florida Internet failed to comply with the strict liability requirements of TILA by committing numerous violations. These violations include: a. Florida Internet failed to properly disclose the finance charge assessed in the transaction, using that term and a brief description such as the dollar amount the credit will cost you as required by 12 C.F.R. 226.18(d);

b.

c.

d.

e.

f.

g.

h.

i.

Florida Internet failed to properly disclose the annual percentage rate using that term and a brief description such as the cost of your credit as a yearly rate as required by 12 C.F.R. 226.18(e); Florida Internet failed to properly disclose the amount financed using that term and a brief description such as the amount of credit provided to you or on your behalf as required by 12 C.F.R. 226.18(b); Florida Internet failed to make the required disclosures clearly and conspicuously and failed to group the disclosures together, segregated from everything else in violation of 12 C.F.R. 226.17(a)(1); Florida Internet failed to provide an itemization of the amount financed and failed to separate this itemization from the other material disclosures in violation of 12 C.F.R. 226.17(a)(1) and 18(c); Florida Internet failed to disclose the finance charge and the annual percentage rate more conspicuously than the other disclosures as required by 12 C.F.R. 226.17(a)(2) and, in fact, the most conspicuous disclosures were disclosures which were not in conformity with TILA; Florida Internet did not properly disclose the total of payments using that term and a descriptive explanation such as the amount you will have paid when you have made all scheduled payments in violation of 12 C.F.R. 266.18(h); Florida Internet failed to accurately disclose the finance charge in accordance with 12 C.F.R. 226.4 and 226.18 because it failed to include the mandatory insurance premium in the finance charge; and Florida Internet failed to accurately disclose the finance charge in accordance with 12 C.F.R. 226.4 and 226.18 because it failed to include the pre-paid interest charged in the finance charge.

80. As a direct result of Florida Internets violations of TILA, as described above, Plaintiffs and others similarly situated, have been damaged because they have entered into loans with a criminally-usurious interest rate which are secured by access to their checking accounts without the uniform disclosures required in consumer finance transactions. They have made payments toward these loans and have had sums withdrawn from their account as a result of these loans, thereby, they have lost the use of these sums. 81. It has been necessary for Plaintiffs to retain Jacksonville Area Legal Aid, Inc. to prosecute this action. Counsel has incurred and will incur costs and other related expenses in prosecuting this action and his counsel is entitled to reimbursement of its costs and attorneys fees pursuant to 15 U.S.C. 1640(a)(3). WHEREFORE, Plaintiffs on behalf of themselves and those similarly situated request this Court to enter a judgment against Florida Internet pursuant to 15 U.S.C. 1640 as follows: A. Awarding statutory damages as provided by 15 U.S.C. 1640;

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B. C.

Awarding attorneys fees and costs pursuant to TILA; and Granting such other and further relief as may be deemed just and proper. COUNT FIVE: ELECTRONIC FUNDS TRANSFER ACT

82. Plaintiffs bring this class action lawsuit against Florida Internet, on behalf of themselves and others similarly situated, seeking statutory damages for its systematic and uniform violations of the federal Electronic Funds Transfer Act, 15 U.S.C. 1693k (hereinafter EFTA) in their consumer loan transactions. Plaintiffs allege: 83. Plaintiffs reallege the allegations contained in Paragraphs 2 through 39, inclusive and incorporates the same herein. 84. Plaintiffs and others similarly situated are consumers within the meaning of EFTA, 15 U.S.C. 1693k. 85. In connection with the loan transactions of the Plaintiffs and others similarly situated, they were required to sign a standardized, form loan document, copies of which are attached hereto as Composite Exhibit A and are by this reference incorporated herein. 86. As a condition of obtaining the subject loan, Plaintiffs and others similarly situated were required to agree to the following standardized language contained in the form loan contract: I hereby authorize Florida Internet to withdraw funds by ACH debitentries from my checking, savings account or credit indicated abovefor those services contracted herein. Further, the contract provides: I understand that the foregoing ACH authorization is a fundamentalcondition to induce Florida Internet to accept my Florida Internet Computer Access Rebate application. Consequently, such authorization is intended to be irrevocable. In the event I terminate such ACH authorization Florida Internet in its sole discretion may deem such termination to be a default, and may terminate this contract without notice to me. 87. The EFTC prohibits any person to require, as a condition of the extension of credit, repayment by the means of preauthorized electronic fund transfer. 15 U.S.C. 1693k 88. As a result of these violations, Florida Internet is liable to the Plaintiffs and those similarly situated for actual and statutory damages, attorneys fees and costs as provided by 15 U.S.C. 1693. 89. It has been necessary for Plaintiffs to retain Jacksonville Area Legal Aid, Inc. to prosecute this action. Counsel has incurred and will incur costs and other related expenses in prosecuting this action and his counsel is entitled to reimbursement of its costs and attorneys fees pursuant to 15 U.S.C. 1693m. WHEREFORE, Plaintiffs request this Court to enter a judgment against Florida Internet as follows:

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A. B. C.

Awarding Plaintiffs and others similarly situated actual and statutory damages as provided by 15 U.S.C. 1693m; Awarding attorneys fees and costs; and Granting such other and further relief as may be deemed just and proper. COUNT SIX: FLORIDA CONSUMER COLLECTION PRACTICES ACT

90. Plaintiffs bring this action against Florida Internet seeking statutory damages for its violations of the Florida Consumer Collection Practices Act, Fla.Stat., 559.55, et seq. (FCCPA) in connection with their consumer pay day loan transactions. Plaintiffs allege: 91. Plaintiffs reallege the allegations contained in Paragraphs 2 through 39, inclusive incorporates the same herein. 92. The FCCPA was enacted to protect Florida consumers from creditors and debt collectors who seek to collect debts through illegal means. 93. Plaintiffs are debtors and consumers within the meaning of FCCPA, 559.55(2), Fla. Stat. (2002). Florida Internet alleges Plaintiffs owe a consumer debt as this phrase is defined by 559.55(1) and (2), Fla.Stat. (2002). 94. Florida Internet creditor or debt collector within the meaning of FCCPA, 559.55(3) or (6), Fla. Stat. (2002). 95. In connection with the subject transaction, Florida Internet has contacted the Plaintiffs with threats of criminal prosecution and has illegal debited their checking accounts as is more particularly described above. 96. The FCCPA prohibits creditors from claiming, attempting or threatening to enforce a debt when such a person knows that the debt is not legitimate or assert the existence of some other legal right when such person knows that the right does not exist. See 559.72 (9), Fla. Stat. (2002). Florida Internet knew or should have known that it did not have the right to threaten or pursue criminal prosecution for non-payment of the debt. Further, Florida Internet did not have the right to require the automatic debit of the full amount of the loan, plus interest from the borrowers accounts. 97. Florida Internets collection practices described above violate the Florida Consumer Collections Practices Act, 559.55, Fla. Stat. et seq. 98. As a result of the above-referenced violations of the Act, Plaintiffs have been and continue to be subjected to an unwarranted and illegal collection activities and, therefore, have been harmed. 99. As a result of these violations, Florida Internet is liable to the Plaintiffs for actual damages or $1,000.00, whichever is greater, together with court costs and attorneys fees, as provided by Florida Statutes 559.77(2). 100. It has been necessary for Plaintiffs to retain Jacksonville Area Legal Aid, Inc., a nonprofit law firm which provides free legal services to the indigent and working poor, to prosecute civil litigation based upon the Act. Their counsel has incurred and will incur costs and other related expenses in prosecuting this action and his counsel is entitled to reimbursement of their costs and attorneys fees pursuant to 559.77, Fla. Stat. WHEREFORE, Plaintiffs request this Court to enter a judgment against Florida Internet as follows: A. Awarding statutory damages as provided by 559.77, Fla. Stat.; B. Awarding attorneys fees and costs; and

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C.

Granting such other and further relief as may be deemed just and proper.

COUNT SEVEN: FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT 101. Plaintiffs bring this class action lawsuit against Florida Internet on behalf of themselves and others similarly situated, requesting injunctive and declaratory relief and for statutory, punitive and actual damages for its systematic violation of the Florida Deceptive and Unfair Trade Practices Act, Chapter 501, Part II, Fla. Stat., (FDUTPA) the interpretations of the Federal Trade Commission and the federal courts relating to the Federal Trade Commission Act in numerous consumer title loan transactions. Plaintiffs on behalf of themselves and others similarly situated allege: 102. Plaintiffs reallege the allegations contained above in paragraphs 2 through 39, and incorporates the same herein by reference. 103. At all times relevant hereto the Plaintiffs and others similarly situated were consumers as defined by 501.203(7), Fla. Stat. 104. At all times relevant hereto, Florida Internet was engaged in trade or commerce as defined by 501.203(8), Fla. Stat. as a consumer pay day loan company located in Jacksonville, Duval County, Florida. 105. Florida Internet is prohibited from engaging in unfair, deceptive or unconscionable acts or practices in the conduct of its consumer loan transactions. 106. The Plaintiffs and others similarly situated entered into consumer pay day loan transactions with Florida Internet in which they signed standardized, form loan contracts, copies of which are attached hereto as Composite Exhibit A and which are by this reference incorporated herein. 107. In connection with the subject loans, Florida Internet engaged in the following unfair, deceptive and/or unconscionable actions by; a) assessing interest rates in excess of those allowed by Florida usury law as more particularly described in Count One above, b) failing comply with the Florida Deferred Presentment Act as is more particularly described in Paragraphs 19 and 27 through 32, inclusive, above; c) failing to comply with the federal Truth in Lending Act as is more particularly described in Count Four above, d) failing to comply with the federal Electronic Funds Transfer Act as is more particularly described in Count Five above, and by e) violating the Florida Consumer Collection Practices Act as is more particularly described in Count Six above. Violations of federal and Florida consumer laws concerning the protection of debtors constitute violations of FDUTPA. 108. As a direct result of Florida Internets unfair, deceptive and/or unconscionable practices, Plaintiffs and others similarly situated have been damaged because they have been charged exorbitant interest rates in a consumer loan for which they received none of the required disclosures concerning the cost of the loan, they have been subject and continue to be subjected to illegal pay day loan charges and illegal collection practices. 109. Plaintiffs and others similarly situated have been aggrieved and continue to be aggrieved as Florida Internet has charged and is charging exorbitant interest rates in consumers in loans during the execution of which the consumers received none of the required disclosures concerning the cost of the loan. Florida Internet has and continues to violate the Florida Deferred Presentment Act by charging illegal sums, rolling over loans, failing to provide the 60 grace period and including other illegal provisions in its loan contracts. Lastly, Florida Internet has and continues to illegally electronically debit consumers personal accounts for sums

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purportedly due in its pay day loan transactions and illegally threaten with criminal prosecution. Florida Internets actions have been and continue to be unfair and deceptive. 110. It has been necessary for Plaintiffs to retain Jacksonville Area Legal Aid, Inc., a non-profit law firm which provides free legal services to the indigent and working poor, to prosecute civil litigation based upon the Act. Counsel has incurred and will incur costs and other related expenses in prosecuting this action and his counsel is entitled to reimbursement of their costs and attorneys fees pursuant to 501.2105(1),(3) and 501.211, Fla. Stat. WHEREFORE, Plaintiffs request this Court to enter a judgment against Florida Internet and therein to: A. Declare Florida Internets standardized and uniform practices to be in violation of the Florida Deceptive and Unfair Trade Practices Act; B. Temporarily and permanently enjoin Florida Internet from engaging in pay day loan transactions; C. Permanently enjoin Florida Internet from engaging in deceptive and unfair trade practices; D. Award Plaintiffs and other similarly situated damages as provided by 501.211(2), Fla. Stat.; E. Award attorneys fees and costs pursuant to Fla. Stat. 501.2105 and 501.211, Fla. Stat. (1993); and F. Grant such other and further relief as may be deemed just and proper. DEMAND FOR JURY TRIAL Plaintiffs demand a trial by jury on all issues so triable.

JACKSONVILLE AREA LEGAL AID, INC.

[Attorney for Plaintiffs]

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