Tiffany Kelker was stuck.
In January 2011, finding herself in need of some financial assistance after the holidays, she had taken out a $600 “payday loan” from an online lending business that advertised fast cash.
In the ensuing months, however, the Billings, Mont., mother of five watched helplessly as the company withdrew money electronically from her bank account, according to court documents. Eventually the lender took more than $1,800 in interest charges alone, which court records calculated as an annual percentage rate of 780 percent.
Kelker would eventually file suit against Geneva Roth Ventures Inc., an Internet-based lending operation headquartered in Mission.
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The Montana case was only the latest in a collection of legal issues involving Geneva Roth and its CEO, Mark Curry. Several other states already had barred the company from doing business, according to court records.
Geneva Roth does not stand alone. Indeed, Kansas City is home to several Internet lending companies.
But in many ways, the Montana case highlights the controversial tactics such companies use — and the increased scrutiny their tactics have attracted from state and federal agencies.
“Payday lending is right up there among our top issues,” said Nikhil Singhvi, staff attorney for the Federal Trade Commission.
And yet lenders can be difficult to track.
The office listed on Kansas paperwork as the Geneva Roth headquarters in Mission features no sign in front, although state records still list it as an active company.
Despite multiple attempts, Curry could not be reached for comment for this story. Curry’s Montana lawyer issued a statement on his behalf, however, saying Geneva Roth is no longer in business and was happy to resolve the Montana case.
Whatever the status of Geneva Roth, Curry established himself as a significant figure within the industry. He was an early member of the Online Lenders Alliance, a group founded in 2005 purportedly to serve as a kind of industry watchdog.
The goal of the alliance, according to its website, is “to protect the industry against potential damage caused by inept lenders.”
“Like many new Internet industries, it can be a little bit of a Wild West mentality,” said Peter Barden, a spokesman for the alliance. “And the folks that brought it together wanted to create some really good rules based on integrity, with the focus on the consumer.”
But while industry proponents argue that online payday lenders offer an important and quick form of financial relief not available elsewhere, critics accuse these companies of charging exorbitant interest rates, failing to adequately inform consumers about fees and trapping vulnerable individuals.
“All of these consumers are desperate for money,” said Jim DePriest, a deputy attorney general in Arkansas whose office has helped halt the dealings of various online lenders in the state.
“We see it over and over again where people borrow some amount of money, say $300, and (before long) they’ve paid back $1,000 — and they still owe.”
In recent years, numerous state agencies have joined the Consumer Financial Protection Bureau and FTC to crack down on predatory lenders.
In Arkansas, for instance, Geneva Roth agreed to pay $60,000 to the attorney general’s office after the state argued that the company’s annual interest rate for its customers ranged from 364 percent to 1,365 percent — exponentially higher than the 17 percent loan interest rate the state’s constitution allows.
(Although the defendants — Geneva Roth Capital Inc., Geneva Roth Ventures Inc., LoanPointUSA.com and Curry — denied violating any Arkansas laws, they agreed to stop doing business in the state. In this lawsuit, as in others, Geneva Roth was listed as doing business as LoanPoint.)
Kansas officials said they had received no complaints against Geneva Roth, and complaints in Missouri are not public record.
But in Connecticut, a cease-and-desist order issued by the state banking commissioner accused Geneva Roth of charging multiple customers interest rates in excess of 700 percent. Other states — including California, Indiana, Oregon and Washington — also have banned Geneva Roth from doing business within their boundaries.
And then there was Kelker’s case in Montana.
As loan payments were continually taken from her bank account, Kelker fell behind on other bills. Unsure what to do, she found herself locked in a nightmarish situation.
“I thought, how am I going to get these people off my back?” Kelker said. “Because it just felt like there was no end to the madness. I was paying them and paying them and paying them, but there was just no end.”
After a meeting with a consumer credit counselor aimed at managing some of her debt, Kelker was referred to Montana-based attorney John Heenan, who agreed to take her case pro bono.
The case would later grow into a class action lawsuit that included more than 380 Montana residents.
In court filings, Geneva Roth denied Kelker’s allegations, adding that because any loans were made outside the state of Montana, the claims didn’t fall under state law.
In the end, however, the company agreed to forgive outstanding debts, according to court documents, and Heenan said that totaled hundreds of thousands of dollars. Curry’s company also agreed to pay a $233,000 settlement, most of which was dispersed among the plaintiffs, and cease business dealings in Montana unless it registers with the state, according to court records.
Heenan describes the online lending industry as a “cat and mouse” game, with some lenders going to great lengths to remain a step ahead of regulators. Some, for instance, have moved into Native American tribal jurisdictions or overseas as a way to avoid prosecution. Others operate under a variety of names in an effort to make their companies’ dealings difficult to track.
And unlike storefront lenders, which feature concrete business locations, online lenders often work in the shadows of the Internet.
“That can add a level of complexity for the consumer that a storefront won’t have,” said Singhvi of the FTC, which has reached settlements with some companies stemming from alleged deceptive practices. “Because a consumer can very easily go back to a store and resolve any consumer complaint face to face.”
Vess Miller, an Indiana attorney whose lawsuit against Geneva Roth, LoanPoint and Curry last December resulted in a $1.35 million settlement, puts it more bluntly.
“They make it so you can’t actually get a hold of them,” he said of online lenders. “Nobody can actually find out where they are unless you do a lot of digging.”
Indeed, Geneva Roth’s listed headquarters yield little information.
Tucked into suburban Johnson County, the building listed on a state business filing as Geneva Roth Ventures Inc. sits on a quiet residential street, not far from a Target and a collection of fast-food restaurants. The building itself is rather unremarkable — unlike other nearby businesses, there are no signs indicating what services it might offer.
“I don’t know what they do,” said an employee at a neighboring business. “I don’t know if they’re a call center or what.”
On a recent weekday, a receptionist at the building told a Star reporter that Curry was unavailable. Another employee offered to take the reporter’s information, although the message would go unreturned.
A week later, an employee arrived at the locked front door to greet a visitor.
Asked what company was operating out of the building, she initially declined to answer.
But when asked whether it was, in fact, Geneva Roth, she quickly said no.
“This is MacFarlane Group,” she replied.
Nevada records list Curry as secretary and treasurer of the MacFarlane Group. On its website, the company describes itself as being “dedicated to helping businesses succeed” and lists information technology and analytics among its services.
In an email, Peter Habein, the Montana attorney who represented Curry and Geneva Roth in the Kelker case, said Geneva Roth is no longer in business.
“Geneva Roth and the brand Loan Point USA have not been in business for some time,” Habein wrote, speaking on behalf of his client. “This business had offered online short-term loans to customers applying from Montana. In winding up the business, the company is pleased this case could be settled on mutually agreed terms.”
However, a check of the Kansas secretary of state’s website raises questions about Geneva Roth’s status.
Records indicate that as recently as three months ago, Curry filed paperwork on behalf of Geneva Roth Ventures Inc. with the Kansas secretary of state’s office. The office’s website lists the company as “active and in good standing.”
Habein said his client has told him that Geneva Roth “has no staff, no office, no website, and that it is in the process of being dissolved.”
Although no paperwork has been filed with the state in an effort to dissolve the company, the company might still be somewhere in the process, a Kansas official said.
Tracking the whereabouts of Curry himself can also be difficult.
In business filings with the state of Kansas, Curry lists a Puerto Rico address. He also has ties to Nevada, hosting a party there in 2012 for a local charity that featured a Monopoly theme and scantily clad women dressed as police officers, according to media reports.
And in multiple attempts to have Curry served with the lawsuit in Montana, Heenan was unsuccessful.
But while tracking down online lenders can often feel like chasing a ghost for everyday citizens and their lawyers, regulatory agencies, at least, seem to be catching up.
“We have the tools to trace where the money is going, so we have a pretty good handle of who’s operating,” said Singhvi of the FTC.
“Even if consumers are left in the dark.”