Attorney General Raoul Announces Settlement With Businesses Over Abusive Payday Loans (Chicago, IL) – Attorney General Kwame Raoul and Illinois Department of Financial and Professional Regulation (IDFPR) Acting Secretary Mario Treto Jr. today announced a settlement with online payday loan generators MoneyMutual LLC; PartnerWeekly LLC and Selling Source LLC.
The regulation resolves the of the attorney general and the IDFPR’s allegations that companies violated Illinois loan laws by generating unauthorized payday loan leads and arranging high-cost payday loans for payday lenders in the out of state, many of whom were also unlicensed. Raoul and IDFPR alleged that the companies violated Illinois consumer fraud and deceptive business practices law by falsely presenting their lending network as trustworthy; however, the terms and conditions of the loan did not comply with Illinois law. The settlement filed with the Cook County Circuit Court requires companies to immediately stop offering loans to borrowers in Illinois without being licensed.
“Payday lenders disproportionately target low-income communities and communities of color, and they make it extremely difficult, if not impossible, for people to escape the cycle of poverty,” said Raoul. “I am committed to protecting Illinois residents from payday lenders who operate illegally and trap people in expensive loans with unaffordable interest rates.”
The attorney general’s office sued the companies in 2014 after the companies refused to comply with a cease and desist order issued by the IDFPR requiring them to obtain a license.
“The department is proud to protect Illinois consumers from unlicensed lenders who target them and their hard-earned income,” said Mario Treto, Jr., acting secretary of the Department of Financial and Professional Regulation. ‘Illinois. “We take this responsibility seriously and will continue to fulfill our mission as opportunities arise in the future.”
According to the lawsuit, MoneyMutual was able to attract borrowers to its website largely by using ads featuring former TV host and famous spokesperson Montel Williams. The companies reportedly generated leads by collecting personal financial information from tens of thousands of Illinois consumers who applied for loans on MoneyMutual’s website. Companies sold this personal financial information to payday lenders who used it to offer loans to potential borrowers.
The attorney general’s office also alleged that the misleading advertising of the companies led borrowers to believe that the lenders in the corporate network were licensed and were in compliance with the law. However, many lenders were not licensed or licensed to lend to Illinois consumers and imposed exorbitant and illegal interest rates and finance charges.
The regulations prohibit the three companies from pursuing the following practices:
- Arrange or offer small loans, online or otherwise, without being approved by the IDFPR.
- Advertise or offer small consumer loan deals or lead generation services in the state of Illinois, unless authorized by the IDFPR.
- To provide services related to arranging or offering small dollar loans to consumers in Illinois without being licensed by the IDFPR.
Senior Deputy Attorney General Tom James handled Raoul’s Consumer Fraud Bureau trial.
Attorney General Raoul Announces Settlement With Businesses Over Abusive Payday Loans