If annual interest rates as high as 500 percent don't deter you from a payday loan, consider this: You could end up in court.

WW has learned that Oak Brook Financial, one of Oregon's largest payday lenders, filed about 4,500 small-claims cases since 2003 in Multnomah County alone. That works out to an average of more than three cases filed each day of the year. Advance America, another large Oregon payday loan company, has filed only seven small-claims cases in Multnomah County since 2003.

On July 7, the president of Oak Brook, Steve Hanson, wrote an op-ed in The Oregonian that cites a 2004 Oregon Department of Consumer and Business Services study showing only 3.5 percent of payday loans are written off for default. The purported conclusion: This is a consumer-friendly industry where people borrow responsibly at reasonable rates.

But legal records suggest a different conclusion. Writing off a loan for default is the last resort for lenders, which means they have already exhausted every method of payment collection. One of those methods is filing a small-claims case, which costs the filer $51.50 for claims up to $1,500 and $98.50 for higher claims up to $5,000. After 30 days trying to collect a debt, Oak Brook files a case, Hanson says. It also files small-claims cases for bounced checks. Hanson says defendants lose about two-thirds of the time, either by court judgment or default if they don't respond.

"A claim is just one of the methods we use to collect a debt, like a telephone call," Hanson says. "You can't reach any conclusion based on the number of small-claims cases."

But Angela Martin, director of the Economic Fairness Coalition for the labor-backed group Our Oregon, says Oak Brook's record of litigation shows the payday loan industry is a "system that sets up people to fail." Apparently at the rate of more than three a day.