Attorney General Mark R. Herring today announced that his office has reached a settlement with a Nashville-based open-end credit plan internet lender, Shiva Finance LLC, which does business as Advance Financial 24/7.
Advance Financial has agreed, as part of the settlement, to provide restitution to approximately 1,500 consumers as a result of the company’s alleged violations of the Virginia Consumer Protection Act.
Under the terms of the settlement, over $1.2 million in total relief will be provided to approximately 1,500 Virginia consumers.
Advance Financial offers short-term loans with periodic interest rates as high as 360 percent to Virginians in the form of open-end cash advances. During the period from October 2017 through Jan. 20, 2020, Advance Financial’s contract with Virginia consumers included a clause which required all parties to either participate in binding arbitration or file suit in a small claims court to resolve all disputes.
Advance Financial then proceeded to file nearly 2,000 collection cases in general district courts throughout the Commonwealth with an attorney, rather than in small claims courts.
The settlement resolves allegations that this conduct violated the Virginia Consumer Protection Act by misrepresenting the forum through which Advance Financial would resolve consumer disputes.
“This kind of online lender that uses predatory practices to take advantage of Virginia consumers by charging extremely high interest rates and violating contracts must be held accountable,” Herring said. “I’m glad we were able to achieve a result that provides much needed relief for consumers, especially during a time that has created significant financial strain on many Virginia families. I want to thank my Predatory Lending Unit for all their hard work and commitment to protecting consumers and investigating predatory lenders to make sure they are complying with Virginia law.”
The settlement provides relief to consumers against whom Advance Financial obtained judgments in a Virginia general district court on or before Feb. 1, 2020, including (1) restitution through a combination of credits to accounts and cash payments which total approximately $359,000; and (2) credits of attorney’s fees and costs awarded as part of the judgments, which total in excess of $830,000.
Advance Financial has also agreed to pay civil penalties in the amount of $10,000 and attorney’s fees in the amount of $10,000, and agreed to a permanent injunction preventing Advance Financial from violating the VCPA.
The Office of the Attorney General will be monitoring Advance Financial’s compliance with the settlement to make sure it is being administered properly.
Consumers who have questions about the settlement may contact Advance Financial directly.
The settlement is in the form of an Assurance of Voluntary Compliance filed for approval with the Circuit Court of the City of Richmond.
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