Consumers who got a payday loan at Advance America or National Cash Advance in North Carolina on or after March 1, 2003 can expect a check in the mail the beginning of next year, thanks to a class action lawsuit settlement.

The North Carolina Advance America settlement resolves a 2004 class action lawsuit that accused the lender of charging illegal fees and interest rates as high as 450%. North Carolina law caps interest for these types of loans at 36%.

Advance America had already stopped lending in North Carolina as a result of an investigation by the North Carolina Attorney General’s Office and the North Carolina Office of the Commissioner of Banks. North Carolina AG Roy Cooper has been actively pursuing payday lenders who engage in illegal lending practices and has been forcing them to cease operations in the state. Filing class action lawsuits against them to recover funds for illegally charged and overcharged borrowers is part of his plan of attack. Three other major payday lenders in North Carolina -- Check Into Cash, Check N Go and First American Cash Advance -- previously reached a class action settlement agreement to stop making illegal payday loans in the state.

Advance America, the country’s largest payday lender, has agreed to pay $18.75 million to settle the class action lawsuit. More than 140,000 North Carolina consumers who got a payday loan at Advance America or National Cash Advance on or after March 1, 2003 will receive payments as part of the proposed class action settlement. If you’re one of these consumers, you do not need to file a claim to be able to participate in the settlement and receive a check. If the settlement is approved, checks will automatically be mailed to all class members who can be located, beginning the first half of 2011.

An attorney for the plaintiffs said four other major payday lenders in North Carolina who took tens of millions of dollars in illegal fees from consumers are currently in litigation now. Advance America recently settled another class action lawsuit in South Carolina in August. Consumers in South Carolina are expected to receive checks for $100 from that class action lawsuit settlement, which included 16 other payday lenders.