HARRISBURG — Attorney General Michelle Henry announced a settlement with SoLo Funds, Inc., regarding the California-based lending platform’s tip and donation features attached to loans made on its platform. The conduct, as alleged, deceptively led borrowers to believe that they were obtaining interest-free loans while actually subjecting them to inflated interest rates.
SoLo markets itself as a community finance platform that matches individual lenders with borrowers seeking small-dollar loans with a repayment term of 35 days or less. As part of these loans, SoLo claims that borrowers may voluntarily agree to pay a “tip” to thank the lender for the loan and a “donation” for maintenance of SoLo’s platform.
The Office of Attorney General alleged the company engaged in violations of Pennsylvania lending laws and unfair and deceptive practices. Under the terms of the agreement, SoLo will modify its business practices in Pennsylvania, pay partial restitution, civil penalties, and costs, and cease all collection efforts.
“This predatory lender used their tip and donation configuration to deceive consumers into paying outrageous and illegal interest rates on loans,” Attorney General Henry said. “This settlement puts a stop to the company’s manipulative conduct and their ongoing collection efforts while providing relief to those who were tricked into the scheme.”
Under the terms of the settlement, in the form of an Assurance of Voluntary Compliance, SoLo agrees to modify its business practices to comply with Pennsylvania law. It will be prohibited from engaging in certain conduct with regard to loans on the SoLo platform involving a borrower or lender located in Pennsylvania.
The company will also pay restitution amounting to $158,000, civil penalties totaling $25,000, and investigation costs amounting to $25,171.51. Additionally, SoLo will cease collection efforts on any unpaid principal, tips, donations, and fees for loans involving a borrower or lender located in Pennsylvania—totaling over $530,000. Pennsylvania consumers who borrowed funds through the SoLo platform will receive further communications if they are eligible for a restitution payment.
Consumers who believe they may have been harmed by SoLo Funds should file a complaint online or contact the Office of Attorney General by phone at 1-800-441-2555 or by email at scams@attorneygeneral.gov.
The Assurance of Voluntary Compliance was filed in the Philadelphia Court of Common Pleas by Senior Deputy Attorney General Debra Djupman Warring. The case was supervised by Assistant Chief Deputy Attorney General Nicholas Smyth.