Attorney General Michelle Henry announced that her office has issued restitution payments to over 1,300 Pennsylvania consumers who borrowed money through California-based online lending platform SoLo Funds, Inc. (SoLo).
On July 1, 2024, Attorney General Henry reached a settlement with SoLo after alleging that the company engaged in violations of Pennsylvania usury and consumer protection laws. In accordance with the terms of this settlement, the Office of Attorney General has distributed a total of $158,924 in restitution funds to 1,309 Pennsylvania consumers.
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, borrowers may agree to pay a tip to the lender for the loan and a donation for maintenance of SoLo’s platform. The Commonwealth alleged that SoLo’s use of its tip and donation model was a backdoor way to attempt to charge excessive interest rates on small dollar loans in violation of Pennsylvania’s Loan Interest Protection Law and Consumer Discount Company Act. In addition to alleged violations of usury laws, the Commonwealth alleged that SoLo has violated the Unfair Trade Practices and Consumer Protection Law by making misleading representations about finance charges on loan disclosure forms; deceptively advertising that loans are “0% APR” with “no finance charge.”
The Attorney General’s settlement with SoLo, in the form of an Assurance of Voluntary Compliance, was filed in the Philadelphia Court of Common Pleas. SoLo agreed to modify its business practices to comply with Pennsylvania law. The company also paid civil penalties in the amount of $25,000 and costs of investigation totaling $25,171.51. In addition, SoLo ceased collection efforts on any unpaid principal, tips, donations, and fees for loans involving a borrower or lender located in Pennsylvania, totaling over $530,000.
Checks were mailed directly to eligible consumers on December 18, 2024. Consumers with questions about the SoLo Funds restitution distribution should visit the settlement administrator’s website, or call 833-472-1993.
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