Attorney General Mark Herring announced Friday that he has reached a settlement with MoneyKey, Inc., a Delaware-based online consumer lender, for alleged violations of the state’s consumer finance statutes and the Virginia Consumer Protection Act (VCPA).
The settlement will provide more than $4 million in forgiven interest and fees to 5,000 Virginians who defaulted on, or are currently paying off, their cash advances, and $18,000 in restitution to more than 170 consumers who fully repaid their cash advances.
“Consumers need to know their rights and all the possible risks before utilizing payday, car title, or open-ended consumer loans,” said Attorney General Herring. “Lenders who want to do business in Virginia have an obligation to operate within the law and we will always fight to hold them accountable when they fail to follow our laws and harm consumers. I’m really pleased with the significant relief we were able to secure as part of this settlement and I hope it also serves as a reminder to consumers to know their rights when they take out a loan.”
The settlement announced today resolves allegations that MoneyKey violated Virginia’s consumer finance statues by imposing illegal charges on borrowers who received open-ended credit loans. It also resolves allegations that MoneyKey violated the VCPA by misrepresenting its licensure status in Virginia and by misrepresenting that its loans were compliant with Virginia’s open-end credit statute, when they, in fact, were not.
The settlement includes the following key terms relating to cash advances made by MoneyKey during the period in question:
- MoneyKey agrees to provide approximately $4 million in interest forgiveness to more than 5,000 Virginia customers who have either defaulted or continue to make loan-related payments;
- MoneyKey agrees to offer approximately $18,000 in refunds to about 170 Virginia customers who have paid off their loans, but were charged fees that allegedly violated Virginia’s consumer finance statutes;
- A permanent injunction preventing MoneyKey from violating the VCPA;
- A permanent injunction preventing MoneyKey from violating the consumer finance statutes in the future by charging and receiving excess interest, unless otherwise allowed by statute; and
- MoneyKey agrees to pay the Commonwealth $30,000 for reimbursement of its legal fees and costs.
The Office of the Attorney General will be monitoring the restitution and forbearance phase of the settlement to make sure it is being administered properly. Consumers who have questions about the settlement may contact MoneyKey’s toll-free number directly at (866) 255-1668.
The civil settlement is in the form of an Assurance of Voluntary Compliance that has been filed with the Richmond City Circuit Court for approval. Assistant Attorney General Mark Kubiak and Senior Assistant Attorney General David Irvin represented the Commonwealth in this matter.