Elevate Credit Ordered to Pay $3.3M for Predatory Lending Practices

Elevate Credit agreed to pay a minimum of $3.3 million for charging people interest rates above the 24% maximum allowed by Washington, D.C for loans and credit lines, according to a statement from the Office of the Attorney General for the District of Columbia.

The settlement resolves a lawsuit filed by the AG’s office against Elevate in 2020. Elevate is not a licensed moneylender in the District and said its loans were less expensive than payday loans, which are illegal in D.C.

More than 2,500 customers are owed refunds, and over $300,000 in interest owed to Elevate will be waived. Further, the online credit solutions firm was ordered to pay a $450,000 penalty to the district and is required to put an end to misleading business practices and keep interest rates below the 24% cap.

“This settlement will put money back into the pockets of District consumers who were illegally overcharged. District consumers should be skeptical of any lender, including so-called FinTech companies, that promise easy money without any financial consequence,” said Attorney General Karl A. Racine.

“The truth is often buried in the fine print. Interest rates like those involved in this settlement often exceed 100% and have a devastating impact on individuals who are in need of an honest and lawful loan. This resolution is part of my office’s continued focus on protecting DC residents from these predatory lenders,” Racine said.

See also: Advocacy Groups Call on Regulators to Ban High-Interest Rate FinTech Loans

Headquartered in Fort Worth, Texas, and founded in 2014, Elevate offers online credit solutions to non-prime consumers facing reduced credit options. In Washington, D.C., the company offered, provided, serviced and advertised two loan products — Rise, with an APR range of 99-149%, and Elastic, ranging between 129-251%.

The public company, which trades on the NYSE under the ticker ELVT, partners with two state-chartered banks to originate both types of loans it offers. Elevate, however, controls the loans, takes on the risks, and retains the majority of the profits, according to the AG’s statement.