An Internet payday lender will pay the state of Minnesota $760,000 to settle a lawsuit filed in 2011 by Attorney General Lori Swanson.
Sure Advance LLC, based in Delaware, also agreed to stop lending to Minnesota customers unless the company registers to do business in the state and complies with state interest rate caps and other consumer protection laws, Swanson said.
She had accused the company of charging interest rates of up to 1,564 percent for short-term loans, which people use to pay for expenses between paychecks. The company had made loans to more than 1,200 Minnesotans.
"Unlicensed Internet lenders charge astronomical interest rates, and many consumers who have applied for loans on the Internet have seen their private information end up in the hands of international criminal fraud rings. People should not take out loans from unlicensed Internet lenders, period," Swanson said in a news release.
Consumers trying to find out if a lender is licensed in the state can check with the Minnesota Department of Commerce.
Under state law, people taking out loans of between $350 and $1,000 cannot be charged more than 33 percent annual interest plus a $25 administrative fee. Fees are further capped for loans under $350.
The $760,000 will go toward consumer restitution, Swanson said.
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