On February 8, 2022, the Attorney General for the District of Columbia (DC AG) announced that a Delaware-based online lender has agreed to pay $3.3 million to refund over 2,500 consumers who allegedly received misleadingly high-cost loans and lines of credit. This agreement resolves a lawsuit filed by the DC AG in the Superior Court of the District of Columbia, which alleged that the lender deceptively marketed various high-cost loan products and engaged in other deceptive and unfair business practices in violation of the District of Columbia Consumer Protection Procedures Act (DC CPPA).
According to the DC AG, the lender provided two types of loans to consumers in the District of Columbia. The first was an installment loan product that advertised an Annual Percentage Rate (APR) range of 99-149 percent. The lender did not disclose the APR for the second product (a credit line), but according to the DC AG, the credit line’s APR ranged between 129-251 percent. The District limits the maximum interest rates lenders can charge to 6 percent or 24 percent per year, depending on the type of loan.
As a result of the settlement agreement, the lender will (1) pay up to $3.4 million in restitution to refund impacted consumers; (2) waive over $300,000 in past due interest owed by consumers; (3) pay a civil money penalty of $450,000 to the DC AG; (4) delete negative credit reporting of impacted consumers; and (4) cease operations that violate consumer protection laws.
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