Attorney General's News Release

December 16, 2003

St. Louis County loan broker illegally charging upfront fees ordered to repay $20,000 to consumers

Clayton, Mo. — A Maryland Heights business sued by Attorney General Jay Nixon for illegally charging upfront fees in order to broker loans was ordered on Monday (Dec. 15) to repay $20,000 to consumers. In addition, St. Louis County Circuit Judge Kenneth M. Romines permanently barred Riverbend Financial Group LLC and its principal officer, Linda M. Orr, from charging, assessing, collecting or receiving an advance fee from a borrower to provide services as a loan broker.

"Advance fee loans often guarantee a loan regardless of the borrower's credit history, but require upfront payment even before the lender is identified and the application is completed," Nixon says. "Missouri law is clear in prohibiting loan brokers from charging fees in advance."

Nixon's lawsuit alleged that one consumer paid $15,000 and another paid $5,000 as advance fees to secure a loan. Those consumers will have that money returned as part of the restitution order.

The court suspended payment to the state of a $2,000 civil penalty and $5,000 for investigative costs if the defendants pay the restitution as scheduled.

The Attorney General's Office is continuing its investigation of a California company, Development Associates LTD, and its principal officer, E. Lance McCarthy, in connection with advance fee loans. Monday's court order requires Riverbend Financial Group and Orr to cooperate fully with the investigation.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818