Payday loan company to refund W.Va. consumers

A Nevada company that used interactive websites to make payday loans has agreed to refund West Virginia consumers a total of $305,446 to settle a lawsuit brought by the state attorney general's office.

Payday loans typically charge high interest rates for short-term loans -- rates that can add up to 600% to 800% in annual percentage rate. A borrower who can't repay the payday loan and interest quickly digs a financial hole when then loan is renewed, which combines the original loan and interest with even more interest payments. The nonprofit Center for Responsible Lending estimates payday loans cost U.S. consumers $3.4 billion each year.

In West Virginia, payday loans are illegal and FFD Cos. agreed -- while denying any wrongdoing -- to refund 576 consumers for fees and interest for payday loans made over the Internet. The settlement closes a lawsuit brought by the state in November.