Payday Loan Contract Bars Class Action, Court Says

Law360, New York (March 19, 2010, 4:19 PM EDT) -- A federal judge has ruled that consumers accusing Payday Loan Store of Illinois Inc. of violating the Truth in Lending Act must arbitrate their claims under a contract with the loan provider and cannot pursue a class action.

Judge Virginia M. Kendall of the U.S. District Court for the Northern District of Illinois ruled Wednesday that the plaintiffs had failed to show that arbitration was impossible or that the class action waiver in the contract was “unconscionable.”

The plaintiffs, all of whom signed a consumer contract...
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