Pennsylvania is one of a handful of states that actually has laws to prohibit payday lending. But despite the best efforts of the state, many people living in Pennsylvania are still able to take out payday loans via online lending sites and other companies that have ties to lending companies on nearby American Indian Tribal lands. The state seems to be fit for a fight, though, as new lawsuits are being filed to help the state of Pennsylvania crack down harder on payday lending companies that are offering services to the people of this state.

Case in point – the recent lawsuit filed by the state attorney general against a Texas-based lending company for allegedly scheming Pennsylvania citizens via an online payday loan scheme. The Attorney General of Pennsylvania, Kathleen Kane, recently announced that her office filed this suit against Think Finance Inc., a company that backs quite a few payday lending companies, like RISE Credit, for violating Pennsylvania laws and targeting borrowers in Pennsylvania to take out expensive payday loans.

The lawsuit alleges that Think Finance used the sway of three Native American tribes to allow them to target consumers in the state of Pennsylvania and to sell those customers alternative financial products (i.e. payday loans.) The tribes, which supposedly served as a cover for the lender, made it possible for Think Finance to bring in earnings through the many financial services that it charges to the actual tribal affiliations.

According to the complaint, this is not the only time that Think Finances has engaged in these types of covert lending actions in order to get around the state’s tough payday lending laws. It has been previously reported that the company was involved in a “rent-a-bank” scheme in which it made use of a Philadelphia bank to cover for the provision of small dollar, high interest loans to consumers in the state. This operation was actually shut down by the federal government not too long ago.

The Attorney General’s suit also named Selling source LLC – the company that backs MoneyMutual – as a defendant in this lawsuit because this company allegedly played an active role in the actions of Think Finance. It is alleged that MoneyMutual’s website and TV commercials – those famous spots with Montel Williams – have been used to generate online leads for Think Finance backed loans, and that MoneyMutual received commissions for these leads.

The lawsuit also claims that Selling Source continued with its efforts to refer Pennsylvania consumers to Think Finance after the company was ordered to cease the referrals back in a 2011 agreement with the Pennsylvania Department of Banking.

Other defendants named in this lawsuit were several debt collection agencies, including the Washington law firm of Weinstein, Pinson and Riley and National Credit Adjusters LLC, which were supposedly used to collect on the debts initiated by the illegal loans provided by Think Finance.

All of the defendants are currently accused of violating multiple Pennsylvania laws, including but not limited to violations against the Unfair Trade and Consumer Protection Law and the Fair Credit Extension Uniformity Act. The lawsuit is seeking restitution for all the consumers who were taken in by this scheme and there will also be some civil penalties handed out of up to $1,000 for every violation of state laws and $3,000 for every charge that involved lending/debt recovery to senior citizens in the state. It seems that Pennsylvania is very serious about taking action against short term lenders and that payday lending companies may want to think twice before trying to offer any such financial services in this state.