December 6, 2012
Cash America to Make Voluntary Reimbursement to Ohio Customers
FORT WORTH, Texas, Dec 04, 2012 (BUSINESS WIRE) -- Cash America International, Inc. CSH +1.69% 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.
"We hold ourselves to the highest ethical standards. When we discovered this problem, we took swift action," said Daniel R. Feehan, Chief Executive Officer of Cash America. "First and foremost, we will take care of our customers and we are implementing rigorous measures to do so. We will also institute additional steps to help prevent this problem from occurring again."
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.
"We are deeply committed to our customers, our shareholders and our 7,000 employees who work diligently to provide the highest level of service to our communities," Mr. Feehan said. "We are taking these steps to demonstrate our commitment to corporate integrity and community responsibility."
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