Rutledge Announces $300,000 Judgment Against Loan Shark Bailey’s Superstore
July 20, 2020
Says, ‘Bailey abused the criminal court system to take advantage of vulnerable Arkansans’
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today announced a judgment against Dennis Bailey and the businesses he controls: Bailey’s Superstore, Inc., Bailey’s Bottleshoppe, Brooks Bailey Enterprises, Inc., Bailey’s On Main, Bailey’s Pawn and Gun, and Newsmart Liquor. Rutledge filed a lawsuit against Bailey and his businesses under the Arkansas Deceptive Trade Practices Act for his illegal use of the criminal court system to collect debts. The judgment requires that Bailey pay $50,000 in restitution, $250,000 in suspended civil penalties and withdraw all outstanding affidavits previously submitted to the Hot Check Coordinator valued at approximately $125,000.
“Bailey abused the criminal court system to take advantage of vulnerable Arkansans who needed money to pay their bills or for emergencies—some even paying for a family member’s funeral,” said Attorney General Rutledge. “Anyone who has experienced these illegal business practices should call my office to let us do the fighting for you.”
The complaint filed in July 2019 showed Bailey often loaned large amounts of money to his customers, and as security for the loans, Bailey accepted a signed blank check. When the debt was due, consumers could buy the blank check back for the cost of the original loan plus interest that violates the Arkansas Constitution’s 17 percent usury cap. If the consumer were unable to pay the debt on time, Bailey would add the principal and interest together, enter it as the amount to be paid on the check, and deposit it into one of his business bank accounts. If the check returned unpaid by the bank, Bailey turned those checks over to the prosecuting attorney’s office for enforcement under Arkansas’s Hot Check Law despite the law’s clear prohibition against its use for the collection of pre-existing debts. In some instances, consumers who did not repay Bailey’s loans on time were arrested, jailed, and convicted of crimes they never committed.
Under the consent judgment in this case, Bailey and his businesses are permanently restrained and enjoined from offering or providing usurious loans, the deferred deposit of checks for usurious fees, or charging usurious check-cashing fees. He is also enjoined from holding any check, debit or credit card, driver’s license or identification, or EBT card as a promissory note or security for the payment of any money, loan, or debt. He and his businesses are barred from submitting any transaction to any prosecuting attorney’s office for collection or law enforcement action that violates Arkansas law. The judgment bars Bailey from retaliating against any person who reports that their debt to Bailey was wrongfully submitted to law enforcement for collection or who provided information or cooperated with the State in its investigation and prosecution of the case and from threatening consumers with taking any of the above actions. No person employed by or affiliated with Bailey can violate these provisions.
Bailey must cooperate and assist the State to resolve all wrongful arrests or convictions of affected consumers, reinstatement of victims’ wrongfully-suspended licenses, refunds of fees and fines, and expungement of any criminal records.
Victims of these or similar business practices should contact the Attorney General’s office to file a consumer complaint at (800) 482-8982 or go to ArkansasAG.gov.