Wis. Appeals Court Shreds Payday Lender Terms

Law360, New York (May 25, 2010, 5:20 PM EDT) -- A Wisconsin appeals court ruled Tuesday that so-called payday lenders cannot require customers to waive their class action rights, breathing new life into a woman’s fight against Cottonwood Financial Ltd.’s efforts to recover on a defaulted loan.

The Wisconsin Court of Appeals, Third District, ruled that Cottonwood’s arbitration agreement is substantively unconscionable because it improperly precludes customers from participating in class action litigation, a right protected by the Wisconsin Consumer Act.

The appeals court remanded the case for the trial court to determine if the arbitration...
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