RICHMOND, Va. (WRIC) — Federal court in Richmond has given preliminary approval to a class-action settlement that would provide $489 million in aid to victims of illegal internet loans.
The ruling was made on Thursday, May 12 and will affect approximately 555,000 consumers who have been charged more than 600% interest on loans by predatory internet lenders.
Lawsuits 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, gathered to address the ongoing challenge of illegal payday loans.
“These law firms took the illegal lenders through the courts,” said Jay Speer, executive director of Virginia Poverty Law Center. “We are so grateful for their tenacity and passion for taking part in this three-year battle for today’s settlement.”
Today’s settlement is one of several these law firms have obtained in recent years with illegal internet lenders, including a $433 million settlement in 2019.
The proposed settlement provides for a $450 million consumer debt forgiveness, which will be paid in cash for most consumers.
The settlement will also set aside $39 million for the creation of a community fund for those who have repaid illegal amounts.
Settlement Class Members are not required to submit a claim form and will receive notification via email or US Mail.
In addition to lawsuits, VPLC assists borrowers through the organization’s predatory loan hotline at: 866-830-4501 and advocate for better laws to protect borrowers.