The Virginia Attorney General recently entered into a settlement agreement requiring an online lender to pay $316,000 for 1) falsely advertising that it was licensed to operate in Virginia, and 2) charging interest rates and fees above the State’s allowed maximums.
The lender, based out of Las Vegas, Nevada, offered closed-end installment loans over the internet and advertised that it was licensed by Virginia’s Bureau of Financial Institutions—which regulates certain consumer lenders—to do business in Virginia. In fact, the lender was not licensed. The lender also charged interest rates up to 29.9%, notwithstanding the state’s 12% usury limit, and charged late payment fees which exceeded those allowed under state law.
As part of the settlement, the lender agreed to pay $31,000 to consumers who were charged more than the maximum legal usury rate, to forgive $235,000 in loan interest for Virginia consumers who did business with the lender, and to pay a $50,000 civil penalty to the State, in addition to accepting injunctive relief.
The suit was brought by the Predatory Lending Unit of the Attorney General’s Consumer Protection Section. The unit was established in November 2016 as part of a larger effort by the Attorney General’s office to provide more aggressive enforcement of Virginia’s consumer protection laws.
For a copy of the State’s press release announcing the settlement, click here.