Predatory Lending
Over the past several decades, predatory lending has emerged as one of the most significant consumer financial protection issues facing individuals in the U.S. Unscrupulous operators of high-interest lending businesses try to evade their liability for making illegal loans through loopholes in the law. However, consumer financial protection laws in Illinois and across the country provide consumers with options for fighting against these companies’ abusive practices.
Have you received a predatory loan from ZocaLoans, Minto Money, First Loan, or another predatory lender? Call Wallace Miller at 312-697-1906 to discuss your options. In a free and confidential consultation, we’ll work with you to find out what’s going on and determine whether you have a case.
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The shady practices of predatory lenders
The practice of predatory lending involves offering short-term loans at astronomically high interest rates, often in the triple digits. Operators of these payday loans take advantage of people who urgently need money. These individuals are often unable to pay off the first loan and are forced to take out additional loans to keep from defaulting, leading to a never-ending cycle of debt. Meanwhile, these payday loan companies rake in huge profits.
Many states have passed laws designed to stop these abusive loan terms. These laws often impose a limit on interest rates and ban lenders from offering credit at higher rates. But predatory lending businesses have done their best to skirt these laws through various means–some dubiously legal, and others plainly illegal.
Understanding usury laws in Illinois
Usurious loans are loans made at an unreasonably high interest rates. In an effort to protect consumers from loans like these, the Illinois General Assembly passed the Illinois Predatory Loan Prevention Act (PLPA) in 2021. The PLPA is designed to stamp out predatory loans and protect borrowers by prohibiting a lender from making a loan to an Illinois resident at an interest rate higher than 36 percent.
Any loan made in violation of the PLPA is null and void, and no person or entity has any right to collect, attempt to collect, receive, or retain any money from the borrower related to such loan. In other words, if a lender collects money from someone via an illegal loan, they must give that person their money back.
Loans made by an unlicensed lender to an Illinois resident at an interest rate greater than nine percent also violate the Illinois Interest Act, which allows a consumer to recover statutory damages of twice the interest contracted for—a serious penalty.
Illinois means business when it comes to protecting its citizens from usurious loans. It is a felony for an unlicensed lender to make a loan with interest higher than 20 percent. The interest rates on loans made by ZocaLoans all exceed 500 percent, and ZocaLoans is not licensed by the State of Illinois. The interest on some loans made by First Loans and Minto Money exceed 700 percent.
This means that loans made by ZocaLoans, Minto Money, and First Loan are illegal in the State of Illinois. Period.
Q&A
What can I do about my payday loan?
Loans like those made by ZocaLoans, Minto Money, and First Loan are illegal in almost every state. If a court determines that your loan violates state law, you are likely not required to pay it back.
In fact, individuals who have been targeted by this type of illegal lending practice may be able to recoup the money that they lost, in addition to compensation for the suffering these companies have caused.
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Wallace Miller is proud to fight for all those who have been harmed by the oppressive lending practices of ZocaLoans, Minto Money, First Loan, and other similar payday lenders. Our predatory lending team, led by Matthew J. Goldstein, is working hard to hold the people responsible for these abusive lending operations accountable. As this class action evolves, we will continue to fight to obtain compensation for the individuals they harmed.
The legal team at Wallace Miller has more than 160 years of cumulative experience fighting for consumers’ rights. All consultations are completely free and confidential, and there are no out-of-pocket fees—our law firm only receives payment if you do.
Have you suffered from predatory lending practices? Our team wants to hear your story. Call 312-467-7493 and let’s talk about your potential case.
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