0
0
0
s2sdefault
powered by social2s

Image of the Virginia State Seal

Commonwealth of Virginia
Office of the Attorney General

Mark Herring
Attorney General

202 North Ninth Street
Richmond, Virginia 23219

 

For media inquiries only, contact:  
Charlotte Gomer, Press Secretary
Phone: (804)786-1022 
Mobile:(804) 512-2552
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

ATTORNEY GENERAL HERRING ALLEGES ILLEGAL PREDATORY LOANS IN SUIT AGAINST ONE OF VIRGINIA’S LARGEST ONLINE LENDERS

~ AG Herring’s suit against Net Credit, one of the largest online lenders operating in Virginia, seeks restitution on behalf of affected consumers ~

RICHMOND, VA (May 4, 2018) - Attorney General Mark R. Herring announced today that his Predatory Lending Unit has filed a lawsuit against Net Credit, one of the largest online lenders operating in Virginia, for lending and collections practices that allegedly violate the Virginia Consumer Protection Act. The lawsuit alleges that Chicago-based Net Credit issued loans of $1,000 to $10,000 to more than 47,000 Virginia borrowers between 2012 and 2018 with interest rates from 34% to 155%. In one loan cited in the complaint, a Virginia borrower was responsible for more than $6,000 in repayments for just $2,000 borrowed.

 

“We’ve seen more and more Virginians turn to online lenders in a time of need only to find they’ve signed up for a debt trap that is going to cost them hundreds if not thousands of dollars in finance charges and interest,” said Attorney General Herring. “I believe we need stronger laws to protect Virginians from predatory loans, whether issued online or in-person, but until we get those, I’m going to make sure the laws we have are enforced and make sure that companies can’t come into our state and abuse financially vulnerable Virginians.”

 

Attorney General Herring’s complaint alleges that Net Credit operated without a license in Virginia and misled borrowers about its licensure status in Utah in an attempt to avoid interest rate caps when loaning money to Virginians. Unless a lender qualifies for an exception, Virginia law caps the interest rate on loans at 12% per year. Instead, Net Credit forced borrowers to repay loans at exorbitant rates that cost Virginia consumers thousands of dollars.

 

The Complaint also alleges that Net Credit tried to illegally collect money from borrowers who had filed for bankruptcy and were entitled to protection from collections activities. This conduct allegedly occurred in the form of automatic withdrawals from consumers’ bank accounts and collections emails while court-ordered bankruptcy stays were in effect.

 

The lawsuit has been filed in Fairfax County Circuit Court. Attorney General Herring is seeking restitution on behalf of consumers who were charged illegal interest, civil penalties, attorneys' fees, and a court order banning Net Credit from further violating the Virginia Consumer Protection Act.

 

The Commonwealth is represented in this matter by attorneys in Attorney General Herring’s first of its kind Predatory Lending Unit, which has recovered more than $22 million from online lenders including CashCall, MoneyKey, Mr. Amazing Loans, Opportunity Financial, and MoneyLion. Overall, Attorney General Herring’s Consumer Protection Section has recovered more than $243 million in relief for consumers and payments from violators.

 

# # #