AG Henry Reaches Settlement with California-Based Lender over Alleged Illegal Tip and Donation Scheme, Saving Pennsylvanians Hundreds of Thousands of Dollars

July 2, 2024 | Topic: Consumers

HARRISBURG — Attorney General Michelle Henry announced a settlement with SoLo Funds, Inc., regarding the California-based lending platform’s tip and donation features attached to loans made on its platform. The conduct as alleged deceptively led borrowers to believe that they were obtaining interest-free loans while actually subjecting borrowers to outrageously inflated interest rates.

SoLo markets itself as a community finance platform that matches individual lenders with borrowers seeking small dollar loans with a repayment term of 35 days or less. As part of these loans, SoLo claims that borrowers may voluntarily agree to pay a “tip” to thank the lender for the loan and a “donation” for maintenance of SoLo’s platform.

The Office of Attorney General alleged the company engaged in violations of Pennsylvania lending laws and unfair and deceptive practices. Under the terms of the agreement, SoLo will modify its business practices in Pennsylvania, pay partial restitution, civil penalties, and costs, and cease all collection efforts.

“This predatory lender used their tip and donation configuration to deceive consumers into paying outrageous and illegal interest rates on loans,” Attorney General Henry said. “This settlement puts a stop to the company’s manipulative conduct and their ongoing collection efforts, while providing relief to those who were tricked into the scheme.”

Under the terms of the settlement, in the form of an Assurance of Voluntary Compliance, SoLo agrees to modify its business practices to comply with Pennsylvania law. It will be prohibited from engaging in the following conduct with regard to loans on the SoLo platform involving a borrower and/or lender located in Pennsylvania:

  • Making or facilitating loans through its platform where the interest rate/finance charge of the loan exceeded that allowed under Pennsylvania’s Loan Interest Protection Law and Consumer Discount Company Act;
  • Issuing loan disclosures stating a $0 finance charge for loans made on the SoLo platform where the borrower agreed to pay a tip and/or donation;
  • Advertising that its loans are “0% APR” with “no finance charge” when the loans include a tip and/or donation; and
  • Directing collections notices to consumers stating that delinquent accounts will be reported to Credit Reporting Agencies, when in fact SoLo did not report account information to Credit Reporting Agencies.

Under the settlement, the company will also pay restitution in the amount of $158,000, civil penalties in the amount of $25,000, and costs of investigation totaling $25,171.51. SoLo will also cease collection efforts on any unpaid principal, tips, donations, and fees for loans involving a borrower or lender located in Pennsylvania, totaling over $530,000. Pennsylvania consumers who borrowed funds through the SoLo platform will receive further communications if they are eligible for a restitution payment.

Consumers who believe they may have been harmed by SoLo Funds should file a complaint online, contact the Office of Attorney General by phone at 1-800-441-2555 or by email at

The Assurance of Voluntary Compliance was filed in the Philadelphia Court of Common Pleas by Senior Deputy Attorney General Debra Djupman Warring, and the case was supervised by Assistant Chief Deputy Attorney General Nicholas Smyth.

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