On April 1, 2024, North Carolina Attorney General Josh Stein filed a complaint against a consumer lender, claiming that the lender charged consumers hidden premiums and fees for add-on products associated with its offering of small dollar personal loans, in violation of the Consumer Financial Protection Act (CFPA), the Truth In Lending Act (TILA), as well as New Jersey, Pennsylvania, and Washington consumer protection laws.
The lawsuit is a multistate action in which Attorney General Stein is joined by Attorneys General of Pennsylvania, the District of Columbia, Illinois, Indiana, New Jersey, New York, Oregon, Tennessee, Washington, and Wisconsin. The complaint alleges that the lender did not disclose add-on products or blatantly misrepresented the products when communicating with consumers. The complaint further alleges that Defendant engaged in illegal, aggressive sales tactics to extend credit to new borrowers, including by mailing unsolicited “live checks” to prescreened consumers, pressuring consumers to refinance their existing loans, and then charging those consumers for hidden add-on products associated with the new loans. These actions allegedly amount to unfair, deceptive, and abusive acts and practices (UDAAP) in violation of the CFPA.
The complaint seeks full restitution of all affected borrowers, repayment of alleged unlawfully gained profits, civil penalties, cancellation or reformation of existing agreements, and cessation of alleged illegal practices.