The state Attorney General's office said the telemarketing company "tricked consumers into signing up for overpriced loans."
Letters are being mailed this week to approximately 20,000 North Carolinians who may be eligible to seek refunds. ASDC is paying $2.1 million for consumer refunds and the cost of administering the refund claim process.
ASDC allegedly promised consumers low-interest loans of $500 to $1,500 in exchange for an up-front payment of $100, which included a $40 administrative fee and the first and last monthly loan payments of $30 each.
Consumers who signed up had their bank accounts debited almost instantly. When consumers tried to cancel, they were told that the $40 fee was non-refundable.
After the first payment, consumers learned that they had been enrolled in a "discount club" and would have to pay a $30 membership fee for three months before applying for a loan. Consumers who eventually got a loan discovered that they owed a loan repayment fee on top of the club's monthly fee, resulting in total payments of nearly $41 per month for a 12-month, $500 loan, a fact never mentioned in the company's initial pitch.
To be eligible to receive a refund, consumers must complete the claim form and return it, postmarked no later than Oct. 6, 2005 to: American Savings Discount Club Settlement Fund, Claims Administration Center, P.O. Box 2008, Chanhassen, MN 55317-2008.
Consumers with questions about the refund process or who think they are eligible for a refund but do not receive a letter and claim form within the next 10 days can call the Claims Administrator, Analytics, Inc., toll-free at
(866) 890-4856.
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