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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 16years. Her focus is in the area of consumer finance and bankruptcy with an emphasis on assetpreservation and community economic development , unfair and deceptive consumer practices,debt collection and other consumer concerns raised by low-income individuals. She is involvedin 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 itspayday loans to avoid complying with consumer protection laws. Payday lending involves veryexpensive short term consumer loans that are payable at the consumer’s payday but oftenrenewed at great cost.1 The payday lender allegedly disguised its loans as sales of internet accessand of career training video tapes. The complaint alleges that the disguised loans violate theFlorida 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 Thecompliant seeks declaratory and injunctive relief, actual damage, and attorney fees.

1 See National Consumer Law Center, Cost of Credit § 7.5.5 (2d ed. 2000 and Supp.). See also, National ConsumerLaw 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).

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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 Floridacorporation doing business as Florida Internet,

Defendants.

CLASS REPRESENTATION COMPLAINT

The Plaintiffs, [Consumer 1] and [Consumer 2], on behalf of themselves and otherssimilarly situated, by and through their undersigned attorneys, sue the Defendants, Jag Fl, LLC, aFlorida 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 federalTruth in Lending Act, the federal Electronic Funds Transfer Act, the Florida ConsumerCollection Practices Act and the Florida Deceptive and Unfair Trade Practices Act based uponFlorida Internet’s loan scheme created in an effort to avoid Florida usury laws and to misledFlorida consumer into signing its criminally usurious loans without the benefit of the federally-mandated consumer credit disclosures. Defendants use a standardized, form, consumer loancontracts entitled “Internet Computer Access Rebate Purchase Application and Contract” in thesubject transactions. The Defendants also use illegally extortionate practices in their attempts tocollect these illegal loans.

2. The Plaintiffs are seeking class declaratory and injunctive relief (temporary andpermanent), statutory and damages, in excess of $15,000.00, exclusive of interest, costs andattorney’s 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.

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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 inJacksonville, Duval County, Florida though his business, Florida Internet.

6. The Defendant, Kimberly Daniels, is a Florida resident, residing at 81 ZoradydaAvenue , 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 Florida’s Usury Laws and pay day loan andfederal cost of credit laws, Defendants attempted to disguise their loan transactions astransactions for the sale of Internet usage time and “career” training video tapes.

10. Florida Internet’s true business practice was to accept borrowers’ checks withknowledge that there are insufficient funds in the account to cover the amount of the checks, toadvance money to the borrowers using the check and access to the borrowers’ checking accountas collateral and to require repayment of the loan within two weeks. The loan’s short term isdesigned 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 duringregular business hours which were subject to change and its customers never received the videotapes. 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 borroweractually use this services as Internet access is provided all around town for free. Also, thecomputers 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 inan amount equal to one-sixth of the “rebate.”

13. When a borrower contacts Florida Internet for a loan, they are told they have to bringin a pay stub and must have a bank account.

14. As a condition of the Internet usage time sale, borrowers are required to provideFlorida Internet with a check marked “VOID” and often a check in the amount of the loan plusinterest. They require a borrower to agree to allow Florida Internet to automatically deduct sumsfrom his/her checking, saving or credit card account.

15. Florida Internet holds these checks until the loan falls due. On that day the borroweris 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 ainterest only payment or will automatically debit the borrower’s account for an amount equal tothe 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.

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17. Florida Internet typically assesses a finance charge of $20.00 for every $100.00 thecustomer borrows.

18. Florida Internet never provides the cost of credit disclosures required by the FederalTruth in Lending Act.

19. Florida Internet also violates §560.404, Fla. Stat . by failing to provide the statutorily-

required grace period and by allowing borrowers to roll over their loans by paying off one loanwith a higher, more expensive loan. Instead of allowing the grace period, Florida Internetillegally 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 CatalogueSales, Inc., the predecessor in interest, and any of their agents, officers or employees fromengaging 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 FloridaUsury laws.

THE PLAINTIFF’S TRANSACTION

21. Plaintiffs contacted Florida Internet to get a loan. They were told they had to bringin a pay check stub and asked if they had a bank account. They were also required to bring acheck.

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 $80.00every two weeks which would never reduce the principal of his loan. He was later required toborrow $600.00 more after Florida Internet wrongfully debited his account. The Plaintiffs’ loandocuments are attached hereto as “Composite Exhibit “A” and are by this reference incorporatedherein.

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. FloridaInternet required borrowers provide automatic access to their checking accounts.

25. When Plaintiffs were unable to repay the entire principal and interest just two weeksafter the loan was obtained they had to pay the “interest only” or risk having the principal andinterest automatically deducted from their accounts. When this amount was paid or debited it didnot reduce the principal amount of the loan.

26. When Plaintiffs were late in their payments, Florida Internet illegally threatenedthem with criminal prosecution if payment was not forwarded immediately.

27. Florida Internet’s standardized, form loan contract did not provide the disclosuresrequired 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 theirtransaction in violation of §560.404(9), Fla. Stat .

30. Florida Internet’s contract contains provisions which require Plaintiffs to waive legalrights in violation of §560.404(22), Fla. Stat ., fails to provide the costs of credit disclosures

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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 containinformation 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 requiredby §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 claimon behalf of a class defined as all persons who satisfy the following criteria:

a. They entered into a standard, form consumer loantransaction with Defendants for a pay day loan in whichthey 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 Internetenters into hundreds of consumer pay day loan transactions each month.

35. There are questions of law and fact common to the class, which questionspredominate over any questions affecting only individual members. The principal issues raisedby this claim are:

a. Whether Florida Internet’s uniform business practices and contract violate Floridausury laws;

b. Whether Florida Internet engaged in engaged in a pattern of criminal activity orengaged 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 Internet’s uniform business practices and standardized, form

contracts violate the FDUTPA;e. Whether Florida Internet’s uniform business practices and standardized, form

contracts violate the Florida Deferred Presentment Act;f. Whether Florida Internet’s uniform business practices and standardized, form

contracts violate the federal Electronic Funds Transfer Act;g. Whether Florida Internet’s uniform collection practices violate the Florida

Consumer Collection Practices Act; andh. 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 Internet’s practices which are the subject of thiscomplaint. This can be determined by ministerial examination of papers.

37. The Plaintiffs’ claims are typical of those of the class members. All are entitled torelief by virtue of Florida Internet’s violations of the consumer protection statutes which areraised in Plaintiffs’ complaint.

38. The Plaintiffs will fairly and adequately protect the interests of the class. They hasretained counsel experienced in handling class actions and actions involving unlawful business

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practices. Neither Plaintiffs nor their counsel have any interests which might cause them not tovigorously pursue this action.

39. Certification of a class under Rule 1.220 is appropriate, in that a class action issuperior 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 rightswere violated and in that individual actions are uneconomical. Difficulties likely to beencountered in managing this class action are substantially less than are involved in other typesof cases routinely certified as class actions.

COUNT ONE: USURY

40. Plaintiffs bring this class action against Florida Internet, seeking statutory damagesfor 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 thosesimilarly 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 otherssimilarly 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% perannum 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 Florida’s usury laws by couching the termsof the standardized, form pay day loan transactions as the sale of Internet usage time. Thischaracterization 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 itproperly 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 werecriminally usurious within the definition of Fla. Stat . §§687.071(2), (3) (2000) and which was anextortionate extension of credit pursuant to Fla. Stat . §687.071(1) (e) (2000) which provides:

“Extortionate extensions of credit” means an extension of credit wherebyit is the understanding of the creditor and the debtor at the time anextension of credit is made that delay in repayment or failure to makerepayment could result in the use of violence or other criminal means tocause 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 acriminally usurious interest rate was charged and charged interest in excess of the rate allowedby §560.404(6), Fla. Stat .

49. As a direct result of Florida Internet’s actions, Plaintiffs and others similarly situatedhave suffered and will continue to suffer damages.

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50. Plaintiffs have retained Jacksonville Area Legal Aid, Inc. to represent them and andthe members of the class in this matter. Jacksonville Area Legal Aid, Inc. is entitled toattorney’s fees and reimbursement of its costs.

WHEREFORE, Plaintiffs request this Court enter judgment against Florida Internet andto:

A. Declare that Florida Internet’s loan transaction with Florida consumers whosigned “Internet usage” contracts are rendered void ad initio;

B. Award to Plaintiffs and others similarly situated compensatory and punitivedamages;

C. Award to Plaintiffs attorney’s 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 Floridausury 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 criminallyusurious 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 thecollection of unlawful debts and used or invested, directly or indirectly, such proceeds in theacquisition of title, rights, interest and equity in the establishment and operation of FloridaInternet in violation of §772.103, Fla. Stat.

56. Plaintiffs and others similarly situated are being and have been assessed criminallyusurious interest rates and are begin and have been denied and deprived by Defendants of theirrights under Florida usury and deferred presentment laws. Plaintiffs are also being illegallyharassed 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 similarlysituated continue to suffer the irreparable harm described above for which monetarycompensation is inadequate as they are still being harassed for payment of this illegal loan anddeprived of their statutorily provided grace period.

58. Plaintiffs have retained Jacksonville Area Legal Aid, Inc. to represent them and themembers of the class in this matter. Jacksonville Area Legal Aid, Inc. is entitled to attorney’sfees and reimbursement of its costs.

WHEREFORE, Plaintiffs on behalf of themselves and others similarly situated requestthe Court to enter a judgment against John Gill, Kimberly Daniels and Florida Internet pursuantto §§772.103 and 772.104, Fla. Stat. awarding statutory treble damages and attorneys fees as

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provided by §772.104, Fla. Stat . and granting such other and further relief as may be deemed justand 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 Floridausury laws, the Florida Deferred Presentment Act, the Federal Truth in Lending Act and theFederal Electronic Funds Transfer Act.

62. Plaintiffs and others similarly situated are in doubt as to their rights and status asborrowers under the aforementioned laws as a result of Florida Internet’s deceptive loan

contracts, its assessment of criminally usurious interest rates and its continued attempts to collectthese 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 irreparableharm to Plaintiffs and others similarly situated for the purposes of injunctive relief. Plaintiffs arealso being illegally harassed with threats of criminal prosecution if they do not make theirpayments timely.

64. As a proximate result of Florida Internet’s unlawful actions, Plaintiffs and otherssimilarly situated continue to suffer the irreparable harm described above for which monetarycompensation is inadequate as they are still being harassed for payment of this illegal loan anddeprived of their statutorily provided grace period.

65. There is a substantial likelihood that Plaintiffs will prevail on the merits of theircomplaint.

66. Plaintiffs have retained Jacksonville Area Legal Aid, Inc. to represent them and themembers of the class in this matter. Jacksonville Area Legal Aid, Inc. is entitled to attorney’sfees and reimbursement of its costs.

WHEREFORE, Plaintiffs request the Court to declare Florida Internet’s loans to becriminally 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 allother relief to which Plaintiffs prove themselves and others similarly situated entitled includingan 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 statutorydamages for its systematic failure to provide accurate, material disclosures required by thefederal Truth-in-Lending Act, 15 U.S.C. §§1601, et seq. and implementing Federal ReserveBoard 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:

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68. In connection with Plaintiffs’ and others similarly situated standardized, form loantransactions, Florida Internet was required prepare and provide to consumers, who obtain creditsubject to a finance charge, Truth in Lending disclosure statements according to standardizedpolicies 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 provideclear and accurate Truth in Lending disclosures notifying persons of the material terms of theirloan 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, andincorporate them by reference herein.

71. In connection with Plaintiffs and others similarly situated loan transactions they wererequired to sign a form, loan documents entitled “Internet Computer Access Rebate PurchaseApplication and Contract.” Copies of these standardized, form contract are attached hereto asComposite 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 tocomply with TILA.

73. Plaintiffs and others similarly situated are “persons” and “consumers” as these termsare 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 inLending Act, 15 U.S.C. §1601, et seq. (hereinafter “TILA”) and implementing Federal ReserveBoard Regulation Z, 12 C.F.R. part 226.

76. TILA was enacted for the purpose of assuring a meaningful disclosure of credit termsso that the consumer will be able to compare more readily the various credit terms available andto 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, 444U.S. 555, 559 (1980).

77. In its form, high-interest loan contract, Florida Internet failed to provide clear andaccurate TILA disclosures notifying Plaintiffs and others similarly situated of the material termsof 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 andunclear information concerning the material terms of their high-interest loan secured by theirchecking 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 liabilityrequirements 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 descriptionsuch as “the dollar amount the credit will cost you” as required by12 C.F.R. §226.18(d);

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b. Florida Internet failed to properly disclose the “annual percentagerate” 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);

c. 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);d. 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);

e. Florida Internet failed to provide an itemization of the “amountfinanced” and failed to separate this itemization from the othermaterial disclosures in violation of 12 C.F.R. §§226.17(a)(1) and18(c);

f. Florida Internet failed to disclose the “finance charge” and the

“annual percentage rate” more conspicuously than the otherdisclosures as required by 12 C.F.R. §226.17(a)(2) and, in fact, themost conspicuous disclosures were disclosures which were not inconformity with TILA;

g. Florida Internet did not properly disclose the “total of payments”using that term and a descriptive explanation such as “the amountyou will have paid when you have made all scheduled payments”in violation of 12 C.F.R. §266.18(h);

h. Florida Internet failed to accurately disclose the finance charge inaccordance with 12 C.F.R. §§226.4 and 226.18 because it failed toinclude the mandatory insurance premium in the finance charge;and

i. Florida Internet failed to accurately disclose the finance charge in accordancewith 12 C.F.R. §§226.4 and 226.18 because it failed to include the pre-paidinterest charged in the finance charge.

80. As a direct result of Florida Internet’s violations of TILA, as described above,Plaintiffs and others similarly situated, have been damaged because they have entered into loanswith a criminally-usurious interest rate which are secured by access to their checking accountswithout the uniform disclosures required in consumer finance transactions. They have madepayments 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. toprosecute this action. Counsel has incurred and will incur costs and other related expenses inprosecuting this action and his counsel is entitled to reimbursement of its costs and attorneysfee’s pursuant to 15 U.S.C. §1640(a)(3).

WHEREFORE, Plaintiffs on behalf of themselves and those similarly situated requestthis 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. Awarding attorney’s fees and costs pursuant to TILA; andC. 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 anduniform 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 andincorporates 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 attachedhereto as Composite Exhibit “A” and are by this reference incorporated herein.

86. As a condition of obtaining the subject loan, Plaintiffs and others similarly situatedwere required to agree to the following standardized language contained in the form loancontract:

I hereby authorize Florida Internet to withdraw funds by ACHdebitentries from my checking, savings account or credit indicatedabovefor those services contracted herein.

Further, the contract provides:

I understand that the foregoing ACH authorization is afundamentalcondition to induce Florida Internet to accept my FloridaInternet Computer Access Rebate application. Consequently, suchauthorization is intended to be irrevocable. In the event I terminate suchACH authorization Florida Internet in its sole discretion may deem suchtermination to be a default, and may terminate this contract without noticeto 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 thosesimilarly situated for actual and statutory damages, attorneys fees and costs as provided by 15U.S.C. §1693.

89. It has been necessary for Plaintiffs to retain Jacksonville Area Legal Aid, Inc. toprosecute this action. Counsel has incurred and will incur costs and other related expenses inprosecuting this action and his counsel is entitled to reimbursement of its costs and attorneysfee’s pursuant to 15 U.S.C. §1693m.

WHEREFORE, Plaintiffs request this Court to enter a judgment against Florida Internetas follows:

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A. Awarding Plaintiffs and others similarly situated actual and statutory damages asprovided by 15 U.S.C. §1693m;

B. Awarding attorney’s fees and costs; andC. 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 itsviolations 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, inclusiveincorporates the same herein.

92. The FCCPA was enacted to protect Florida consumers from creditors and debtcollectors 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 thePlaintiffs with threats of criminal prosecution and has illegal debited their checking accounts asis more particularly described above.

96. The FCCPA prohibits creditors from claiming, attempting or threatening to enforce adebt when such a person knows that the debt is not legitimate or assert the existence of someother 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 orpursue criminal prosecution for non-payment of the debt. Further, Florida Internet did not havethe right to require the automatic debit of the full amount of the loan, plus interest from theborrowers’ accounts.

97. Florida Internet’s collection practices described above violate the Florida ConsumerCollections Practices Act, §§559.55, Fla. Stat. et seq.

98. As a result of the above-referenced violations of the Act, Plaintiffs have been andcontinue to be subjected to an unwarranted and illegal collection activities and, therefore, havebeen harmed.

99. As a result of these violations, Florida Internet is liable to the Plaintiffs for actualdamages or $1,000.00, whichever is greater, together with court costs and attorneys fees, asprovided by Florida Statutes §559.77(2).

100. It has been necessary for Plaintiffs to retain Jacksonville Area Legal Aid, Inc., anonprofit law firm which provides free legal services to the indigent and working poor, toprosecute civil litigation based upon the Act. Their counsel has incurred and will incur costs andother 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 Internetas follows:

A. Awarding statutory damages as provided by §559.77, Fla. Stat.;B. Awarding attorney’s 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 forstatutory, punitive and actual damages for its systematic violation of the Florida Deceptive andUnfair 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 CommissionAct in numerous consumer title loan transactions. Plaintiffs on behalf of themselves and otherssimilarly situated allege:

102. Plaintiffs reallege the allegations contained above in paragraphs 2 through 39, andincorporates 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 inJacksonville, 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, copiesof which are attached hereto as Composite Exhibit “A”“ and which are by this referenceincorporated herein.

107. In connection with the subject loans, Florida Internet engaged in the followingunfair, deceptive and/or unconscionable actions by; a) assessing interest rates in excess of thoseallowed by Florida usury law as more particularly described in Count One above, b) failingcomply with the Florida Deferred Presentment Act as is more particularly described inParagraphs 19 and 27 through 32, inclusive, above; c) failing to comply with the federal Truth inLending Act as is more particularly described in Count Four above, d) failing to comply with thefederal Electronic Funds Transfer Act as is more particularly described in Count Five above, andby e) violating the Florida Consumer Collection Practices Act as is more particularly describedin Count Six above. Violations of federal and Florida consumer laws concerning the protectionof debtors constitute violations of FDUTPA.

108. As a direct result of Florida Internet’s unfair, deceptive and/or unconscionablepractices, Plaintiffs and others similarly situated have been damaged because they have beencharged exorbitant interest rates in a consumer loan for which they received none of the requireddisclosures concerning the cost of the loan, they have been subject and continue to be subjectedto illegal pay day loan charges and illegal collection practices.

109. Plaintiffs and others similarly situated have been aggrieved and continue to beaggrieved as Florida Internet has charged and is charging exorbitant interest rates in consumersin loans during the execution of which the consumers received none of the required disclosuresconcerning the cost of the loan. Florida Internet has and continues to violate the FloridaDeferred Presentment Act by charging illegal sums, rolling over loans, failing to provide the 60grace period and including other illegal provisions in its loan contracts. Lastly, Florida Internethas 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 Internet’s actions have been and continue to be unfair and deceptive.

110. It has been necessary for Plaintiffs to retain Jacksonville Area Legal Aid, Inc., anon-profit law firm which provides free legal services to the indigent and working poor, toprosecute 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 theircosts and attorneys fee’s 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 Internet’s 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 attorney’s 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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