{"id":6509,"date":"2024-12-05T08:53:56","date_gmt":"2024-12-05T08:53:56","guid":{"rendered":"https:\/\/africanamericanvoice.net\/?p=6509"},"modified":"2024-12-09T08:57:10","modified_gmt":"2024-12-09T08:57:10","slug":"d-c-attorney-general-sues-earnin-for-deceptive-lending-practices-and-illegal-high-interest-loans","status":"publish","type":"post","link":"https:\/\/africanamericanvoice.net\/?p=6509","title":{"rendered":"D.C. Attorney General Sues EarnIn for Deceptive Lending Practices and Illegal High-Interest Loans"},"content":{"rendered":"

by\u00a0Stacy M. Brown<\/a><\/span><\/p>\n

D.C. Attorney General Brian L. Schwalb announced that his office has filed a lawsuit against ActiveHours Inc., operating as EarnIn, accusing the app-based payday lender of deceptive practices and providing illegal high-interest loans to more than 20,000 residents of the District.<\/p>\n

The lawsuit claims EarnIn misled consumers with false advertising, failed to disclose mandatory fees, and operated without the required lending license, all while charging interest rates that exceed legal limits by over 12 times.<\/p>\n

EarnIn promotes its financial product, which they referred to as an \u201cearned wage advance\u201d or \u201ccash out,\u201d as a fee-free, interest-free service that provides instant access to a user\u2019s wages before payday. However, according to the lawsuit, these claims are false.<\/p>\n

The company requires consumers to pay a \u201cLightning Speed\u201d fee of $3.99 to $5.99 per transaction for immediate funds access, effectively transforming the cash advances into high-interest loans. By including these fees in the cost of borrowing, the average annual interest rate for these loans exceeds 300%, far above the District\u2019s 24% cap on interest rates for most loans.<\/p>\n

Schwalb called out EarnIn\u2019s practices, describing them as harmful to financially vulnerable residents.<\/p>\n

\u201cEarnIn lures in hard-working, cash-strapped workers with the false promise of free instant cash advances and then charges them unlawfully high interest,\u201d he said. \u201cThis predatory business model is illegal. Especially at a time when the cost of living is already too high, my office will always have Washingtonians\u2019 backs. Today, we\u2019re suing to hold EarnIn accountable and to put money back in District residents\u2019 pockets where it belongs.\u201d<\/p>\n

The lawsuit alleges EarnIn has misled consumers since 2016, conducting over a million transactions with District residents.<\/p>\n

The day before the lawsuit was announced, Ram Palaniappan, CEO and founder of EarnIn, took to X (formerly known as Twitter) to tout his company\u2019s success in the nation\u2019s capital.<\/p>\n