Reviewed by Matthew J. Goldstein.
Across the United States, predatory lenders take advantage of consumers by making loans with exorbitantly high interest rates. However, many states, including Illinois, set limits on how high these rates can be—and if you’ve received a loan with an interest rate higher than what is permissible under state law, you may be eligible for compensation.
Through a proposed class action in the United States District Court for the Northern District of Illinois, our attorneys are fighting for those harmed by ZocaLoans and other predatory lenders.
If you’ve received a loan from ZocaLoans, reach out to the legal team at Wallace Miller at (312) 629-4407 or via our online questionnaire. In a free and confidential consultation, we’ll discuss your circumstances and help you determine the best path forward.
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Timeline
February 2022 — Wallace Miller’s client files a class action against ZocaLoans for illegal predatory lending practices.
2021 — Illinois passes the Predatory Loan Prevention Act (PLPA), which sets an interest rate cap of 36 percent on loans made by licensed lenders. Loans made in violation of the act are automatically void.
1968 — The Truth in Lending Act provides the first standardized requirements for presenting loan information to consumers.
Holding predatory lenders accountable
In 2020 and 2021, a lending operation called ZocaLoans made four high-interest, short-term payday loans to an Illinois resident. All the loans had interest rates greater than 500 percent, and one had an interest rate exceeding 690 percent. Tens of thousands of similar loans have been made to Illinois consumers.
When the fourth loan came due, the individual reached out to Wallace Miller attorney Matthew J. Goldstein about the astronomically high interest rates. The attorney confirmed what he had suspected: the loans made by ZocaLoans were illegal, and void under Illinois law.
ZocaLoans is not the only company making these types of illegal loans. Companies across the U.S. are setting up similar businesses to extract as much value as possible at the expense of consumers.
Understanding usury laws in Illinois
A number of laws in Illinois are designed to protect consumers from usurious loans (or loans made at unreasonably high interest rates). The Illinois Interest Act prohibits unlicensed lenders from making loans to Illinois residents at interest rates greater than nine percent—and permits consumers to recover twice the contracted interest as statutory damages. And a loan made by an unlicensed lender at a rate exceeding 20 percent is a felony. The interest rates on loans made by ZocaLoans all exceed 500 percent.
The 2021, the Illinois General Assembly passed the Illinois Predatory Loan Prevention Act (PLPA), designed to protect Illinois borrowers from usurious loans by prohibiting lenders from making loans at interest rates greater than 36 percent. Loans that violate the PLPA are null and void, and the lender has no right to collect any money related to the loan.
The bottom line: high-interest loans made by ZocaLoans are illegal in the State of Illinois. If ZocaLoans has targeted you with a predatory loan, you may be able to join a lawsuit against them.
Who runs ZocaLoans?
While ZocaLoans claims to do business on the lands of the Rosebud Sioux Tribe in South Dakota, our attorneys discovered that the lender actually operates out of Florida. The entity behind the operation is 777 Partners, LLC, a Miami-based private equity firm, and its affiliates and investors.
777 Partners and its affiliates and investors are responsible for all substantive aspects of the ZocaLoans lending operation—funding, marketing, loan origination, servicing, electronic funds transfers, and collections—and have made tens if not hundreds of millions of dollars from the high-interest loans. 777 Partners then uses this money to finance big purchases (including full ownership of an Italian sports team).
The lawsuit against those responsible for ZocaLoans
In February of 2022, our client filed a class action lawsuit against 777 Partners and other parties involved in making the illegal loans. Our client is fighting to obtain a court order to stop ZocaLoans from collecting the illegal loans, as well as an order declaring that the loans are void. Our client also seeks, among other things, an award of damages to compensate himself and a class of consumers to whom similar loans were made.
What can I do about my predatory loan?
Loans like those made by ZocaLoans are illegal in almost every state. If a court determines that your loan violates state law, you are likely not required to pay back the loan.
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.
What Wallace Miller is doing to fight predatory lenders
Wallace Miller is proud to fight for consumers who have been harmed by the predatory lending practices of ZocaLoans and other payday lenders. We are working hard to hold the people responsible for these illegal loans accountable and will continue to fight for compensation for the individuals they harmed.
The legal team at Wallace Miller has more than 100 years of cumulative experience fighting for plaintiffs’ 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 312-261-6193 and let’s talk about your potential case.