RALEIGH, N.C. - Hundreds of North Carolinians are about to get their money back. A Florida payday lender, accused of preying on people in desperate need of a car, reached a big settlement with the Attorney General.
“Every single customer here in North Carolina of that company is going to get their money back,” said North Carolina Attorney General Josh Stein.
400 NC consumers are going to get money back after Approved Financial charged them exorbitant interest rates for the car loans.
“They were offering money for a loan online for 200 percent interest rates.” Stein told FOX 46. “Outrageous loan shark interest rates in violation of NC law, and then they were demanding the borrower put up the car title as collateral, so if you'd have trouble paying the loan, they would snatch your car and sell it,” he said.
Stein took Approved Financial, which wasn’t licensed in the state of North Carolina, to court.
Monday, they announced the company has to pay almost half a million dollars in consumer restitution by January 31st.
“We have laws on the books to ensure that when lenders lend you money, it's at a fair interest rates,” Stein said. “This company was charging outrageous interest rates and they were putting the car title on as collateral for the loan. That's illegal here in North Carolina.”
Stein says Approved Financial tried to dodge NC consumer protection laws by asking borrowers to cross state lines to pick up their money. Now, however, the company is forced to cancel and forgive all outstanding loans from North Carolina consumers, which will total over $300,000 in loan forgiveness.
Per North Carolina law, the interest rate limit is 30 percent. Anything higher than that is illegal. For the 75 consumers who had their cars repossessed and sold at auction, they’ll get the auction proceeds exceeding their loan principal. Four people whose cars were repossessed but not yet sold will get them back.
If you'd like to read more about the judgement, click here.