Intercept Corporation of North Dakota will pay $75,000 to Vermont consumers and $10,000 to the state of Vermont to settle claims that the company violated Vermont consumer protection laws, Attorney General William H. Sorrell announced Thursday.
Intercept processed debits from more than 1,000 consumer bank accounts in Vermont on behalf of at least 26 online lenders of high-interest loans from 2012 to 2013. The annual interest rate of the loans processed by the company allegedly often exceeded 100 to 300 percent even though Vermont law prohibits annual interest above 24 percent.
None of the 26 lenders were licensed to make loans in Vermont.
“Vermont currently has the strongest law in the nation to combat predatory high-interest, unlicensed loans – loans that historically were called payday loans,” Sorrell said. “Our consumer protection law makes payment processors and others who assist illegal lenders directly responsible for the harms caused by illegal loans. This is the second settlement against a payment processor and a further warning to those who assist illegal lenders.”
Under the settlement terms, Intercept will be required to issue a credit of $74.78 to each of 1,003 Vermont bank accounts, totaling approximately $75,000. Intercept will also be required to assist the attorney general in addressing unlicensed lending in the state.