California Department of Business Oversight Reaches $1 Million Settlement with Payday Lender for Deceptive Marketing

California Department of Business Oversight  •  Payday Lending

On February 5, 2015, the California Department of Business Oversight announced that it reached a settlement with a payday lending company over allegations that the company used deceptive sales pitches to market payday loans in violation of the California Lenders Law. The company purportedly structured loans in a way that caused borrowers to take out loans for a greater amount than they wanted or needed, and to charge unlimited interest rates without a consumer’s knowledge. The lender agreed to pay $125 per person in restitution and $1 million in penalties and cost reimbursement. It also agreed to disclose loan minimums and the effect of those minimums on interest rates under state law.

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