Online lender sued by DC Attorney General to pay nearly $4 million settlement
A company accused of offering predatory online loans with interest rates up to 42 times the legal limit in DC has agreed to a settlement announced by DC Attorney General Karl Racine paying almost $4 million to DC residents.
A company accused of offering predatory online loans with interest rates up to 42 times the legal limit in DC has agreed to pay nearly $4 million to residents in a lawsuit to pay DC Settlement announced by DC Attorney General Karl Racine.
Racine’s office sued Elevate Credit, Inc. in June 2020alleging that the company had misleadingly marketed expensive loans and lines of credit to over 2,500 DC residents who were being charged interest rates ranging from 99% to 251%.
The maximum limit in DC is 6% or 24% depending on the type of loan agreement under the Consumer Protection Procedures Act.
“This settlement will put money back in the pockets of District consumers who have been illegally overcharged,” Racine said in a statement. “District consumers should be wary of any lender, including so-called fin-tech companies, that promise easy money without financial consequences. The truth is often in the fine print. Interest rates like those in this comparison often exceed 100% and have a devastating effect on individuals who need an honest and legitimate loan.”
Under the terms of the settlement, Elevate will pay $3.4 million to repay DC residents who paid interest on their loans and $450,000 to the district, the attorney general’s office said.
In addition, the Company agreed to waive over $300,000 in past due interest owed by DC residents; delete adverse credit reports related to loans and lines of credit reported to credit reporting agencies; and to halt charging in excess of the district’s legal ceiling.
Elevate, based in Delaware, denied the allegations and denied violating DC laws or engaging in any deceptive or unfair practices.
Racine’s office has made crackdowns on so-called predatory lenders a part of his office’s efforts to narrow the racial wealth divide in the district.
In November, Racine’s office announced a $2 million settlement with Opportunity Financial, another online lender that his office said was involved in fraudulent lending practices.