Attorney General Suthers Announces Payday Lending Settlement

DENVER – Colorado Attorney General John Suthers today announced that his office has reached a settlement with Sonic Cash, LLC, an internet payday lender based in Boise, Idaho. As part of the settlement, the company has agreed to refund more than $150,000 in finance charges on nearly 2,300 illegal payday loans. An estimated 180 Colorado consumers will receive refunds by May 12, 2008.

The settlement is the first in what the Attorney General hopes will be a string of agreements with internet payday lenders. Over the past months, Suthers has asked 15 companies to cease online lending activity in Colorado. Of those, four have indicated that they intend to comply. The Attorney General is prepared to file suit against those who do not respond or refuse compliance.

“My office will aggressively investigate consumer complaints about internet payday lenders, many of whom openly flaunt Colorado law by circumventing our legal limitations,” commented Attorney General Suthers. “Sonic Cash has set a good example by voluntarily complying with our demands, and we certainly hope other internet payday lenders will follow suit.”

Sonic Cash made payday loans via the Internet to Colorado consumers despite the fact it did not have the required supervised lender’s license. It also charged finance charges that exceeded state limitations. Colorado law allows a $75 finance charge on a $500 payday loan; Sonic Cash charged $100 in fees for the same loan. In addition, Sonic Cash allowed consumers to renew their loans up to three times. In order to reduce the cycle of debt, Colorado law allows only one payday renewal.

Based on information from consumer complaints, the Attorney General’s office warned Sonic Cash in August of 2007 to cease and desist making payday loans to Colorado consumers. In response to the Attorney General’s complaint, Sonic Cash ceased all Colorado lending activity the following month.

In order to resume lending in Colorado, the company has formed Sonic Cash of Colorado, and has applied for a supervised lender’s license. The Attorney General’s Office expects to issue that license once Sonic Cash has fulfilled its obligations under this settlement.

Today’s agreement is the latest case brought against an internet payday lender by Attorney General Suthers. In December of 2005, Quik Payday, Inc., agreed to refund two million dollars in finance charges to Colorado consumers. Additionally, The Attorney General is suing several Internet lenders in the Colorado Court of Appeals that claim to be immune from Colorado law as Tribal entities.

Consumers with complaints about payday loans should contact the Attorney General’s Office at 303-866-4494, or download a complaint form at


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