VIRGINIA BEACH, Va. – Virginia Attorney General Mark Herring announced that his office has reached a settlement with Alternative Finance Company, providing refunds and debt forgiveness to nearly 600 consumers.
Alternative Finance is an open-end credit lender in Virginia Beach and allegedly violated Virginia statutes applicable to consumer finance companies and the Virginia Consumer Protection Act.
“Many lenders operating in Virginia have turned to open-end credit lending as a means to impose extremely high interest on small dollar loans to financially vulnerable citizens of the Commonwealth,” said Attorney General Herring. “My Predatory Lending Unit has dedicated its efforts, in part, to reviewing the practices of open-end credit lenders to ensure that they aren’t taking advantage of Virginians and are operating in compliance with Virginia law. Consumers should strongly consider other available options, like a loan from a credit union, local charity or church organization, or contacting their creditors to arrange a payment plan, before resorting to dangerous open-end credit loans, where a consumer can end up paying thousands more than they originally borrowed.”
Alternative Finance has operated under several different trade names since 2009. They offered short-term loans with periodic interest rates as high as 240% to Virginians in the form of open-end cash advances. They advertised on their website that they did not perform credit checks on their customers.
The company offered its loans out of a location at 4867 Princess Anne Road and over the internet.
“The settlement resolves allegations that Alternative Finance violated Virginia’s consumer finance statutes by imposing illegal charges on borrowers who received open-end credit loans during the statutorily required, finance-charge-free grace period,” the Commonwealth of Virginia Office of the Attorney General. “It also resolves allegations that Alternative Finance violated the VCPA by misrepresenting on its website that it did not perform credit checks to determine a consumer’s eligibility for a loan, and by obtaining judgments in Virginia Beach General District Court against hundreds of consumers without a legal basis for that venue.”
The settlement includes the following terms relating to loans made by Alternative Finance during the period in question:
Alternative Finance agrees to file Notices of Satisfaction in over 300 General District Court cases where it obtained a judgment against a Virginia consumer, amounting to over $450,000 in forgiven debt; Alternative Finance agrees to provide approximately $14,000 in refunds to 180 Virginia customers who paid off their loans during the first billing cycle, but were charged fees that allegedly violated Virginia’s consumer finance statutes; Alternative Finance agrees to provide an additional $17,000 in interest forgiveness to over 60 consumers who have open accounts with Alternative Finance; A permanent injunction preventing Alternative Finance from misrepresenting that it will not perform credit checks on its borrowers in violation of the VCPA; A permanent injunction preventing Alternative Finance from filing suit and obtaining judgments in a legally improper venue in violation of the VCPA; and A permanent injunction preventing Alternative Finance from violating the VCPA and the consumer finance statutes.
Consumers who have questions about the settlement may contact Alterative Finance directly at (757) 490-0339.