augusta free press news

Former Allied Cash Advance borrowers to begin receiving settlement payments

court law
(© Tiko – stock.adobe.com)

Borrowers harmed by the lending practices of Allied Title Lending, doing business as Allied Cash Advance, will begin receiving checks in amounts between $20 and $491.40 as part of a settlement negotiated by Attorney General Mark Herring.

In March 2021, Herring secured a permanent injunction against Allied, $850,000 in restitution for customers, and an additional $150,000 in attorneys fees and costs.

“The resolution my team and I were able to reach with Allied provides meaningful restitution and debt forgiveness to tens of thousands of Virginia consumers,” Herring said. “Before Virginia’s consumer finance laws changed earlier this year, many lenders would turn to open-end credit lending to impose astronomically high interest rates on small dollar loans to financially vulnerable Virginians. I’m also pleased that my team and I were able to resolve our claims against Allied in a way that provides meaningful restitution and debt forgiveness to tens of thousands of Virginia consumers.”

In his complaint, Herring alleged that Allied violated Virginia’s consumer finance law in two ways:

Allied imposed a $100 origination fee on its loans after it provided the loan funds in violation of the requirement that open-end credit plan lenders provide a minimum 25-day grace period before imposing finance charges.

Allied engaged in a pattern of quasi-payday lending by encouraging and permitting borrowers to enter into new contracts each month, essentially rolling over the same loan for months and sometimes years on end.

The Commonwealth is providing checks to the consumers who were most affected by Allied’s wrongful conduct. This includes those who paid off their loans during the grace period and paid the $100 origination fee, and those who were subject to the quasi-payday lending conduct and paid off numerous accounts during the grace period.

Consumers who paid off one account during the grace period will receive $20. Consumers who paid off two accounts will receive $25. All other consumers receiving refunds will receive $9.45 for each account they paid off during the grace period. For example, a consumer who paid off three accounts will receive $28.35 and a consumer who paid off 52 accounts will receive $491.40.

The settlement also included consumer relief in the form of debt forgiveness. Under the settlement, Allied ultimately agreed to stop collecting on any open-end account opened during the period between Sept. 23, 2013, and July 23, 2017. The total value of the debt forgiveness provided on these accounts exceeds $21.7 million.

Herring has hired a settlement claims administrator to distribute restitution monies to affected consumers. Any consumer who believes he or she is eligible for restitution, but who does not receive a refund letter and check, may contact the settlement administrator at the following toll-free number to inquire about his or her eligibility and to provide a more current address: (833) 531-8941.

Consumers who have questions about the settlement, the settlement administration process, and who is eligible for restitution also may review the Frequently Asked Questions posted on Attorney General Herring’s website.

Allied operated at various times out of 23 locations in the following localities across Virginia: Alexandria, Charlottesville, Fredericksburg, Hampton, Harrisonburg, Highland Springs, Lynchburg, Manassas, Mechanicsville, Newport News, Norfolk, Portsmouth, Richmond, Rocky Mount, Staunton, Tappahannock, and Winchester.

 


augusta free press
augusta free press