Lender’s predatory practices trap borrowers, lawsuit says

In the fall of 2007, George Bozis was financially at the end of his rope.

Bozis was unemployed and needed to fill up his gasoline tank, pay his utility bill and still have money left for food. With bad credit, nothing to sell and no one to turn to, Bozis, 52, went to Lucky Cash 4 U, a local money lender, and received a $500 loan to help him squeak by.

The loan quickly ballooned to more than $2,600 because of late fees and penalty fees, said Bozis, who has worked in the food-service industry. He couldn't repay the loan and was sued by Lucky Cash 4 U.

This week, Bozis turned the tables and filed a class-action counterclaim against the money lender, accusing the company of predatory lending practices.

Bozis' civil complaint, brought by Clark County Legal Services, was filed Thursday in Las Vegas Justice Court. It accuses Lucky Cash 4 U of charging so many high-penalty fees that borrowers like Bozis get trapped in an endless cycle of debt.

"The sophisticated and premeditated business plan of Lucky Cash is to entrap borrowers into payments of unenforceable and unconscionable fees," the complaint states.

Once a borrower is late with a payment, they face high fees that "put the borrowers on a debt treadmill from which it is extraordinarily difficult to escape."

Dan Wulz, the attorney representing Bozis, said Lucky Cash 4 U's practices are the type of lending practices the Legislature sought to stop in the 2005 and 2007 sessions.

During the 2005 session, the Legislature enacted laws that restricted the amount, number and duration of certain loans and limited the fees lenders can collect after a borrower defaults, according to the Nevada Attorney General's office.

In 2007, the Legislature strengthened the measures to prevent predatory lenders from getting around the laws.

A representative for Lucky Cash 4 U, who declined to give his name, wouldn't comment because the company hadn't yet been served with the complaint. Matthew Callister, the attorney representing the lender, did not return phone calls seeking comment.

Bozis filed for bankruptcy six years ago after he became overwhelmed by credit card debt. Bozis said he was an unemployed banquet server when he got the $500 loan from Lucky Cash 4 U. His loan quickly grew because of the penalty fees he was charged for not paying it back on time, he said.

The complaint states that the company charges late fees of $18.95 a day for a loan of $500. The company's "fee for exceeding credit limit" on a $500 loan was $59.95, the complaint states.

Bozis said he couldn't repay the loan because he became overwhelmed by bills.

"I couldn't go there and pay them. I just couldn't," he said.

Bozis, who currently lives in a rented room, said he had gone to other local money lenders before going to Lucky Cash 4 U and had similar experiences. But Bozis said he has sworn off money lenders and, even though he's almost homeless, would rather sell his old computer or musical instruments than go back to one.

"All of them are the same," he said. "You borrow a little and pay back a lot."

Contact reporter David Kihara at dkihara@reviewjournal.com or 702-380-1039.