HARRISBURG – Attorney General Dave Sunday announced a settlement with Kansas-based debt collector TrueAccord Corp. regarding the company’s illegal use of tribal lenders, which violated state consumer protection laws.
Under the agreement, TrueAccord has agreed to pay more than $23,000 restitution, with more than 200 Pennsylvanians eligible for payouts. The company has also agreed to modify business practices and cease its use of tribal lending enterprises.
Illegal tribal lending schemes involve lenders targeting consumers who might not be eligible for traditional loans, and allows for the lenders to avoid state regulations regarding interest-rate caps.
“My office is very astute to illegal tribal lending practices and has taken legal action in numerous instances when consumers were exploited with high-interest loans,” Attorney General Sunday said. “I encourage all Pennsylvanians to do their due diligence when it comes to finding short-term funding solutions.”
The Office of Attorney General alleges that TrueAccord collected on online “payday loans” made by lenders claiming to be affiliated with Native American tribes. Many “payday loans” carry illegal sky-high interest rates and fees. The loans that were collected on by TrueAccord violated the statutory interest rate limits set by Pennsylvania’s Loan Interest and Protection Law and the Consumer Discount Company Act.
In attempting to collect on these loans, the Office of Attorney General alleges that TrueAccord misrepresented the legal status of these alleged debts to Pennsylvania consumers which is in violation of the Fair Credit Extension Uniformity Act.
TrueAccord has voluntarily stopped collecting on loans made by tribal lending enterprises, and this settlement agreement ensures that the company will refrain from similar practices in the future. TrueAccord closed all loan accounts from tribal lending enterprises.
Furthermore, TrueAccord must also implement future practices to ensure that they are in compliance with Pennsylvania law prior to collecting on loans made to Pennsylvania residents by certain creditors.
Under the terms of the settlement agreement, TrueAccord agreed to pay restitution of $23,400 and civil penalties of $5,000. Approximately 234 Pennsylvanians who made payments to TrueAccord on tribal enterprise loans will receive notice from the Office of Attorney General that they are eligible to receive a restitution payment. These consumers do not need to take any action to receive their payments.
Consumers who believe they were harmed by TrueAccord or by a usurious lender or other business should file a complaint or contact the Office of Attorney General at 1-800-441-2555 or sc***@*************al.gov.
This settlement was filed by Senior Deputy Attorney General Debra Djupman Warring in the Philadelphia Court of Common Pleas.
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