Four online lenders have recently been sued by the Consumer Financial Protection Bureau (CFPB) for illegal debt collection practices. Golden Valley Lending Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc. are all being charged with heavy violations. Based in California, these lenders allegedly deceived borrowers in multiple states, including Arizona. By suing these companies in federal court, the CFPB hopes to impose stiff penalties and get financial relief for the consumers who’ve been harmed.
Debt Collection Violations Committed against Arizonians by these Deceptive Online Lenders
The lenders in question have been offering online installment loans since 2012. These loans have typically ranged from $300 to $1,200, and have carried annual interest rates ranging from 440% to 950%. If you think these kinds of interest rates are obscene, you’re right. In fact, in several states, these loans violated interest rate caps. In other states, the companies violated licensing requirements. For these reasons, loans from these four companies are considered (in whole or in part) null and void in 17 states, including Arizona.
This means that these lenders have been attempting to collect debt from consumers that they don’t legally owe. For this and other violations, the CFPB suit alleges that these companies have violated the Truth in Lending Act, the Dodd-Frank Wall Street Reform, and the Consumer Protection Act.
Here is a breakdown of the specific allegations brought against Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial, and Majestic Lake Financial:
- In states where the loans in question were wholly or partly null and void, these lenders gave consumers the impression that they were legally permitted to collect payments.
- If they were unable to collect payments with calls and letters, these four companies made electronic withdrawals from consumers’ bank accounts.
- The insanely high interest rates they were assigned to loans were not disclosed on any of the lenders’ websites. You may have been wondering who would ever willingly take out a loan with a 950% interest rate? Answer: People who don’t know that they’re doing it. Reps for the lenders wouldn’t even disclose loan APRs when prospective borrowers called.
It is not yet known whether or not the CFPB has won its case against these four online lenders. However, it is an established fact that Arizona consumers are being harassed daily by abusive lenders and debt collectors. If you’ve been targeted by debt collection agencies that have overstepped their boundaries, you should know that you’re protected by a federal statute called the Fair Debt Collection Practices Act (FDCPA). You can also get a FREE lawyer to make these debt collectors stop.
For a quick video on how to fight back against debt collectors, view this short video entitled How to Fight Back Against Collection Agencies.
The Free and Legal Way to Stop Abusive Debt Collectors
Don’t let debt collectors get away with violations. Debt collection agencies are absolutely NOT allowed to use threatening language with you, call at all hours, or harass you about debt that you don’t even owe. At Credit Repair Lawyers of America, we’ve been putting a stop to debt collector harassment since 2008 for free. How do we do it? All of our fees come from the defendants in cases that are settled. This is why our clients pay nothing for the work we do.