RICHMOND, Va. (WRIC) – The federal court in Richmond has preliminarily approved a class action settlement that would grant relief of $489 million to victims of illicit internet lending.
The verdict came Thursday, May 12, and affects some 555,000 consumers who have been charged over 600% interest on loans by predatory internet payday lenders.
Legal cases against predatory lenders began over three years ago when a coalition of law firms, including the Virginia Poverty Law Center, Kelly Guzzo and Consumer Litigation Associates, joined forces to address the ongoing illicit payday loan challenge.
“These law firms took the illegal lenders to court,” said Jay Speer, executive director of the Virginia Poverty Law Center. “We are so grateful for their tenacity and passion to take part in this three-year fight for today’s settlement.”
Today’s settlement is one of many these law firms have reached with illicit internet lenders in recent years, including a $433 million settlement in 2019.
The proposed settlement provides $450 million in debt relief for consumers, to be paid in cash for most consumers.
The settlement will also provide $39 million to establish a common fund for those who have repaid unlawful amounts.
Peer group members do not need to submit a claim form and will receive notification via email or US mail.
In addition to litigation, VPLC assists borrowers through the organization’s robbery loan hotline 866-830-4501 and advocating better laws to protect borrowers.