On February 7, 2018, Virginia Attorney General Mark R. Herring (Virginia AG) announced a settlement with a Virginia based online lender for alleged violations of the Virginia Consumer Protection Act.
The lender allegedly offered closed-end, installment loans online and falsely claimed it was licensed in Virginia to do so. According to the Virginia AG, the defendant’s loan agreements falsely stated that they were licensed by the Virginia Bureau of Financial Institutions. Finally, the online lender also purportedly charged Virginia consumers annual interest rates as high as 359% APR (well outside of Virginia’s 12% interest rate cap), as well as unlawful $15 check processing fees.
Under the terms of the settlement, the lender has agreed to pay back $359,811 in refunds to 1,161 Virginia consumers, and to forgive $2.3 million in outstanding interest charged to over 2,600 consumers. The defendant also agreed to pay Virginia a $10,000 civil penalty and $20,000 for its costs of investigation and enforcement. The settlement also permanently enjoins the online lender from misrepresenting its license status, interest rates, and fees.