RICHMOND, Va. (WRIC) – The federal court in Richmond has given preliminary approval to a class action settlement that would provide $489 million in relief to victims of illegal internet lending.
The ruling was released Thursday, May 12, and will affect approximately 555,000 consumers who have been charged more than 600% interest on loans by predatory internet payday lenders.
Litigation against predatory lenders began more than three years ago when a coalition of law firms, including the Virginia Poverty Law Center, Kelly Guzzo and Consumer Litigation Associates, came together to address the ongoing challenge of lending illegal wages.
“These law firms have taken the illegal lenders to court,” said Jay Speer, executive director of the Virginia Poverty Law Center. “We are very grateful for their tenacity and passion in engaging in this three-year fight for today’s settlement.”
Today’s settlement is one of many these law firms have secured with illegal internet lenders in recent years, including a $433 million settlement in 2019.
The proposed settlement provides $450 million in consumer debt forgiveness that will be paid in cash for most consumers.
The settlement will also set aside $39 million for the creation of a common fund for those who have repaid illegal amounts.
Settlement Class Members will not need to submit a Claim Form and will receive notice by email or US Mail.
In addition to litigation, VPLC assists borrowers through the organization’s predatory lending hotline (866-830-4501) and advocate for better laws to protect borrowers.