A company that offers so-called “payday loans” from storefronts throughout the Bay Area will pay $10 million for what federal regulators are describing as pushing its customers into a “cycle of debt” and other illegal practices.

In announcing its enforcement action against ACE Cash Express, officials with the Consumer Financial Protection Bureau say the Texas-based loan company lured overdue borrowers into what it termed “payday debt traps.”

Regulators also say the company’s bill collectors pressured people who had borrowed money and were behind on payments to borrow even more.

As part of its investigation, the CFPB also found that ACE used illegal debt collection practices — including making false threats of lawsuits or criminal prosecution — and harassed customers by making an excessive number of collection calls.

ACE bill collectors, according to regulators, even called employers and relatives and shared details of the money owed.

CFPB Director Richard Cordray said:

“ACE used false threats, intimidation, and harassing calls to bully payday borrowers into a cycle of debt. This culture of coercion drained millions of dollars from cash-strapped consumers who had few options to fight back.”

ACE has more than 100 locations in California, more than two dozen in the Bay Area and about 1,500 throughout the U.S. It boasts of being the biggest chain of check-cashing stores the country, as well as the second largest provider of “short term” consumers loans.

As part of the federal enforcement action, ACE will pay out $5 million in refunds and pay $5 million in penalties.

In a statement, ACE said the allegations against the company were for collection practices prior to March 2012, and said that it’s taking voluntary steps to comply with federal regulations.

ACE Cash Express Chief Executive Officer Jay B. Shipowitz said in a statement:

“We are proud of our company, the value we deliver to our customers, our nearly 5,000 associates and the more than 40 million customer visits over the past 12 months. We settled this matter in order to focus on serving our customers and providing the products and services they count on.”

Payday loans are often advertised and described as a way for people to get some cash between paychecks, but officials warn they are usually expensive and borrowers who renew the loans often end up paying more money in fees than the amount they usually borrowed.

The CFPB enforces federal consumer finance laws and supervises banks and other financial institutions. It was formed by an act of Congress in the early days of the “Great Recession.”

John Marshall is an SFBay editor and producer and writer for San Francisco’s KGO Radio. Follow him on Twitter @breakingnewsman.