Cash America said it will reimburse all the money received through collections stemming from legal proceedings initiated by the company in Ohio since the beginning of 2008. Money collected through legal proceedings not affected by the improper paperwork also will be returned, and pending cases will be dismissed.
The company, which operates 120 Cashland and Cash America stores in Ohio, hasn't said yet when or how customers will be reimbursed.
"We are at the very beginning stages," spokeswoman Yolanda Walker told The Columbus Dispatch.
The company estimates the reimbursement program and related expenses will be about $13.4 million.
The Plain Dealer of Cleveland reported that the decision comes on the heels of Monday's decision by the Ninth District Court of Appeals that Cash America's Ohio division improperly made payday loans under the state's mortgage lending act.
But Walker said the court's opinion was not a factor in the company's reimbursement announcement Tuesday.
"We hold ourselves to the highest ethical standards. When we discovered this problem, we took swift action," CEO Daniel R. Feehan said in a statement on the company's website. "First and foremost, we will take care of our customers and we are implementing rigorous measures to do so. We will also institute additional steps to help prevent this problem from occurring again."
The company's statement said Cash America recently determined that a small number of employees did not prepare some court documents properly in many of its Ohio legal proceedings for collections. The company said it believes the filed documents accurately reflect the amount of the debts, the preparation and filing of the documents did not always comply with court rules.