CFPB Files Lawsuit Against Florida-Based Payday Lender | Goodwin
On November 5, 2020, the Consumer Protection Financial Bureau (CFPB) announced that it had filed a lawsuit against a Florida-based payday lender and its CEO in the Southern District of Florida. The complaint alleges that the company violated the Consumer Financial Protection Act (CFPA) by engaging in deceptive acts and practices in connection with the short-term, high-interest loans it offered to its consumers, who are mainly Uber and Lyft drivers. These loans generally range from $ 100 to $ 500 and are repayable in 15 daily installments. However, the company allegedly distorted the APR of these loans to be 440% when in fact the APR ranged from 975% to 978%, in violation of the Florida Usury Act.
In addition, from June 2020, the lender reportedly began accepting deposits from consumers to fund its loan program. The company reportedly misrepresented various terms regarding these deposits, including that each account offered a “guaranteed” APY of 15% and that the accounts were FDIC insured up to $ 500,000. The company’s website is also said to have pop-up messages appearing approximately every minute saying: “A new investor has registered since [state]”, While the average rate of new customers is actually just a few per day.
The complaint seeks an injunction, damages, restitution, civil fines and costs associated with the action.