Skip to content


Senior Citizen Falls Victim to Loan Fraud

In April 2001, Elsie Williams, a senior citizen with a low income, came to Atlanta Legal Aid Society for help. Elsie had taken out a small loan from a company called Stewart Finance, in order to pay her living expenses. As payment towards the loan, Stewart Finance required Elsie to have her Social Security payment sent directly to their office. Stewart Finance would then take their monthly loan payment from Elsie’s check before giving her what was left over.

The loan that Ms. Williams took out with Stewart Finance had an annual interest rate of well over 50%, which was illegal for the size of the loan Elsie had secured. In addition, without her knowledge, Stewart Finance sold her an insurance policy and rolled that cost into her loan.

Atlanta Legal Aid Takes the Case

After hearing Ms. Williams’ story, Atlanta Legal Aid began to investigate the facts and considered that there might be other senior citizens and disabled Social Security recipients who had fallen prey to Stewart’s practices. As Legal Aid began investigating, they uncovered several more clients who had loans with Stewart Finance. It became clear that other borrowers of Stewart Finance had to deal with similar mysterious costs that were tacked onto their loans. For example, Stewart Finance sold many borrowers a car club membership (for things like emergency roadside assistance) when most of them did not even have cars.

After this discovery, Atlanta Legal Aid’s first step was to contact the Social Security Administration and have the clients’ benefits redirected to the clients. Recognizing the severity and widespread impact of Stewart’s harmful practices, Atlanta Legal Aid, in partnership with AARP and the law firm, Bondurant, Mixson and Elmore, decided to file a lawsuit. Together, these groups prepared a lawsuit under the Georgia Fair Business Practice Act and its special provision for unfair practices targeting the elderly and disabled. The suit was filed in July 2002 in Fulton County Superior Court.

A Widespread Problem

Once the lawsuit was filed and the case received some publicity, many more Stewart Finance borrowers contacted Atlanta Legal Aid with complaints that were similar to the plaintiffs. With this new critical mass of similarly situated clients, a second lawsuit was filed. Stewart Finance initially fought the lawsuits, but the court struck down his arguments.

Unintended Consequences

Meanwhile, the filing of the lawsuit made news in Union Point, Georgia, the hometown of the owner of Stewart Finance, Ben Stewart. Ben Stewart had been selling debentures in Stewart Finance to the residents of his hometown. Debentures are a type of bond that allows people to buy in to the company. Ben Stewart used the money that the residents gave him to lend out to Stewart Finance borrowers at astronomical rates, and then promised those residents very high returns on the money they gave him. However, once the residents got wind of Atlanta Legal Aid’s lawsuit, they began to call in their debentures, thereby leading to Stewart Finance’s filing Chapter 11 bankruptcy. The filing of the bankruptcy paused Atlanta Legal Aid’s lawsuits.

At the same time, the Federal Trade Commission (FTC) began to investigate Stewart Finance. Ultimately, the FTC filed an action against Stewart Finance. The Securities Exchange Commission also filed an action against Stewart Finance because of the debentures that Stewart Finance sold. The Georgia Secretary of State took action against Stewart Finance as well. Finally, on the day that Ben Stewart was to appear before the grand jury in Greene County, he committed suicide.

Reparations for the Victims

Although Atlanta Legal Aid could not collect monetary damages for clients because of the bankruptcy at Stewart Finance, the FTC proceeded against Stewart Finance and obtained a settlement. The FTC shared part of the proceeds with our clients, and each client received $2000. Stewart Finance went out of business soon thereafter.

Back To Top