In a significant victory for consumer protection, a comprehensive settlement has been reached with Think Finance, Inc., a national online payday lender, resolving allegations of a massive $133 million illegal Online Payday Loan scheme. This predatory scheme, which levied exorbitant interest rates as high as 448%, impacted an estimated 80,000 Pennsylvania consumers and many more across the nation. Attorney General Josh Shapiro announced the settlement, marking a crucial step towards rectifying the financial harm inflicted by these unlawful lending practices. The agreement promises to void outstanding balances on the illegal loans and provide substantial restitution to affected borrowers.
This landmark settlement stems from a lawsuit initiated in late 2014 by the Pennsylvania Office of Attorney General against Think Finance and Victory Park Capital Advisors, LLC, a Chicago-based private equity firm. The legal action targeted three online platforms operated by Think Finance – Plain Green Loans, Great Plains Lending, and Mobiloans. These platforms allegedly facilitated loans and lines of credit with shockingly high effective interest rates, reaching up to 448 percent, between 2011 and 2014. It’s important to understand that payday loans with interest rates exceeding 200 or 300 percent are illegal in Pennsylvania and many other states due to their predatory nature.
The lawsuit further contended that Think Finance attempted to circumvent state and federal regulations by operating under the guise of Native American tribal affiliations and through a partnership with First Bank of Delaware, a federally chartered bank, for their “ThinkCash” loan product. Attorney General Shapiro asserted that these tactics constituted violations of multiple Pennsylvania laws, including the Pennsylvania Unfair Trade Practices and Consumer Protection Law, the Pennsylvania Corrupt Organizations Act, the Pennsylvania Fair Credit Extension Uniformity Act, and the federal Consumer Financial Protection Act of 2010. Victory Park Capital faced legal action specifically under the Corrupt Organizations Act. It is important to note that while a settlement has been reached, none of the defendants have admitted to any liability or wrongdoing.
“This settlement exemplifies how assertive action at the state level can result in widespread consumer relief nationwide,” stated Attorney General Josh Shapiro. “It will deliver tangible relief to approximately 80,000 Pennsylvanians victimized by the $133 million online payday loan scheme orchestrated by Think Finance and its affiliates, in addition to benefiting consumers throughout the country. Our Bureau of Consumer Protection remains committed to holding accountable any entities seeking to exploit Pennsylvania consumers through the imposition of illegal interest rates.”
The core of the settlement agreement involves the complete cancellation of all remaining balances on the illegal online payday loans. Furthermore, borrowers who have already paid back more than the original loan principal plus a lawful interest rate of 6 percent are entitled to a proportional share of a multi-million-dollar restitution fund established through the settlement. Eligible consumers will automatically receive checks by mail, eliminating any need for them to file claims or take additional action to receive their refunds. In a move to further assist affected borrowers, the defendants will also initiate the process of requesting credit bureaus to remove any negative credit reporting associated with these loans.
Notices will be dispatched to consumers who are identified as eligible for relief under the terms of the settlement. Individuals seeking to ascertain their eligibility for relief and gain further insights into the settlement details can visit www.PAThinkFinanceSettlement.com or contact the settlement administrator hotline at 1-877-641-8838. It is crucial for borrowers who have relocated since obtaining these online payday loans to update their address with the settlement administrator via the provided telephone number to ensure timely receipt of restitution checks, which will be mailed to the addresses on file from their original loan agreements.
The Pennsylvania lawsuit played a pivotal role in galvanizing private legal actions in other states, ultimately culminating in this nationwide settlement. The Consumer Financial Protection Bureau (CFPB) also pursued legal action against Think Finance and collaborated closely with the Attorney General’s office throughout the investigation and settlement process. Attorney General Shapiro has affirmed his commitment to continuing litigation against Think Finance’s former CEO, Kenneth Rees, and its debt collection agency, National Credit Adjusters. A trial involving these remaining defendants is anticipated as early as next year.
For individuals who believe they may have been victims of predatory lending practices, including illegal online payday loans or related debt collection activities, resources are available. Complaints can be submitted through the Attorney General’s website at attorneygeneral.gov/submit-a-complaint/ or by contacting the Bureau of Consumer Protection directly at 1-800-441-2555 or via email at [email protected]. These avenues provide crucial pathways for consumers to report potential abuses and seek assistance in navigating complex financial situations.
