State AGs Sue Personal Lending Company Over Hidden Add-Ons

On August 16, 2022, the Pennsylvania Attorney General announced that a group of attorneys general for the Commonwealth of Pennsylvania, the States of New Jersey, Oregon, Utah, and Washington, and the District of Columbia (collectively, “the AGs”) ​had filed a multistate lawsuit against a personal lending company for allegedly charging consumers for “hidden add-on products” in violation of various state and federal consumer​ protection laws.

​The complaint, filed in the U.S. District Court for the Eastern District of Pennsylvania, alleges that certain low and moderate-income consumers thought they were simply getting a loan with the company, but in reality, their contracts allegedly included insurance policies and other add-on products that the consumers were not aware of. The​ AGs allege that this practice violates Section 1042 of the Consumer Financial Protection Act of 2010 (“Dodd-Frank Act” or “CFPA”), 12 U.S.C. § 5552(a), Section 1036(a)(1)(A) of the CFPA, 12 U.S.C. § 5536(a)(1)(A), and various other state consumer protection statutes in Pennsylvania, New Jersey, and Washington. ​​​

The AGs allege that the lender charged consumers tens of millions of dollars for add-ons and interest on its products between 2015 and 2018.  The complaint seeks full restitution for borrowers, repayment of unlawfully gained profits, civil penalties, and rescission of contracts where consumers were affected by the allegedly unlawful practices.