A company accused of offering predatory online loans with interest rates up to 42 times the legal limit in DC has agreed to pay DC residents nearly $4 million in a settlement announced by DC Attorney General Karl Racine.
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 DC residents as part of a settlement announced by DC Attorney General Karl Racine.
Racine’s office sued Elevate Credit, Inc. in June 2020alleging that the company deceptively marketed high-cost loans and lines of credit to more than 2,500 DC residents who were charged interest rates between 99% and 251%.
The maximum limit in DC is 6% or 24%, depending on the type of loan agreement as defined by the Consumer Protection Procedures Act.
“This settlement will put money back into the pockets of consumers in the district who have been illegally overcharged,” Racine said. said in a press release. “Consumers in the district should be wary of any lender, including so-called fintech companies, who promise easy money without any financial consequences. The truth is often buried in the fine print. Interest rates like those involved in this settlement often exceed 100% and have a devastating impact on people who need an honest and legal loan.
Under the terms of the settlement, Elevate will pay $3.4 million to reimburse DC residents who paid interest on their loans and $450,000 to the district, the attorney general’s office said.
Additionally, the company agreed to waive more than $300,000 in overdue interest owed by DC residents; remove negative credit reports related to all loans and lines of credit reported to credit bureaus; and stop charging rates above the district’s legal cap.
Elevate, which is based in Delaware, denied the allegations and denied violating DC law or engaging in any deceptive or unfair practices.
Racine’s office has made cracking down on so-called predatory lenders part of his office’s efforts to close the district’s racial wealth gap.
In November, Racine’s office announced a more than $2 million settlement with Opportunity Financial, another online lender his office said engaged in deceptive lending practices.
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