Wed, Nov 15, 2023 2:08 PM
By Derek Draplin, The Center Square
Some Colorado consumers could see part of $271,000 in restitution after the state settled with a consumer lending company that collected illegal membership fees.
The settlement with MoneyLion stems from an investigation by the Colorado Department of Law, which found the company marketed loans as low as 5.99% APR if consumers paid $19.99 to $29.99 a month in membership fees, according to the Colorado attorney general’s office.
Once a consumer took out a loan and enrolled, the company wouldn’t allow them to cancel their memberships, which violates Colorado’s Uniform Consumer Credit Code.
As part of the settlement, the company must send eligible consumers a letter notifying them of their refunds.
“MoneyLion has entered into an agreement with the Colorado Administrator, who works on behalf of the Colorado Attorney General, to issue a refund of membership fees paid by you to MoneyLion,” the letter states.
In addition to $271,000 going back to consumers in the state, MoneyLion paid the office $75,000 for cost reimbursement that “that can be used for any restitution where possible, consumer or creditor education, consumer credit or consumer protection enforcement, or efforts to advance the public welfare.”
The company can no longer offer loans under a membership model, the attorney general’s office said.
“In Colorado, we are vigorously protecting consumers from companies that charge illegal lending fees,” Attorney General Phil Weiser said. “When companies hide the true cost of credit from consumers and lock them into expensive, illegal loans, we will hold them accountable under the law for their unscrupulous practices.”