The attorney general’s office recently mailed restitution payments totaling $158,924 to 1,309 Pennsylvanians who borrowed money through California-based SoLo Funds, an online lending platform.
Attorney General Michelle Henry reached a settlement with SoLo on July 1 in the Philadelphia Court of Common Pleas. The attorney general’s lawsuit alleged SoLo violated Pennsylvania’s Loan Interest Protection Law and Consumer Discount Company Act and the Unfair Trade Practices and Consumer Protection Law as well as engaged in deceptive advertising.
Under the terms of the settlement, SoLo agreed to pay $25,000 in civil penalties; pay investigation costs totaling $25,171.51; modify business practices to comply with Pennsylvania law; and ceased collection efforts on any unpaid principal, tips, donations, and fees totaling more than $530,000 for loans involving borrowers or lenders located in Pennsylvania.
SoLo markets itself as a “community finance platform” matching individual lenders with borrowers seeking small dollar loans. The repayment term is 35 days or less. The state alleges the company used deceptive advertising when it marketed the platform as offering 0% APR loans with no finance charge.
Borrowers agreed to pay a tip to the lender for the loan and a donation for the platform’s maintenance. The lawsuit alleged this was a method to attempt to charge excessive interest rates on small dollar loans.