A company accused of offering predatory online loans with interest rates up to 42 times higher than the legal limit in D.C. has agreed to pay nearly $4 million to D.C. residents as part of a settlement announced by D.C. Attorney General Karl Racine.
Racine’s office sued Elevate Credit, Inc. in June 2020, alleging the company had misleadingly marketed high-cost loans and lines of credit to over 2,500 D.C. residents who were charged interest rates of between 99% and 251%.
The maximum limit in D.C. is 6% or 24%, depending on the type of loan contract as set out by the Consumer Protection Procedures Act.
“This settlement will put money back into the pockets of District consumers who were illegally overcharged,” Racine said in a statement. “District consumers should be skeptical of any lender, including so-called fin-tech companies, that promise easy money without any financial consequence. 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 individuals who are in need of an honest and lawful loan.”
Under the terms of the settlement, Elevate will pay $3.4 million to refund D.C. 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 D.C. residents; delete negative credit reporting related to any loans and lines of credit reported to credit bureaus; and to stop charging rates above the District’s legal cap.
Elevate, which is based in Delaware, denied the allegations and denied it had violated D.C. law or engaged in any deceptive or unfair practices.
Racine’s office has made cracking down on so-called predatory lenders a part of his office’s efforts to shrink 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 was engaged in deceptive lending practices.
D.C. residents can report unfair business practices, scams and fraud to Racine’s office by submitting a complaint online, calling (202) 442-9828; or emailing email@example.com.
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