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Payday Lender Advance America To Return $ 8 Million To Pennsylvania Consumers In Settlement | Local company

A state lawsuit against a payday loan company resulted in one of the most significant settlements ever for Pennsylvania consumers, the Pennsylvania attorney general’s office said Wednesday.

Advance America will pay $ 8 million in restitution and forgive outstanding balances of approximately $ 12 million, Attorney General Kathleen Kane said in a statement.

Advance America will pay the state an additional $ 2 million to cover legal fees and the costs of administering the settlement, the statement said.

Officials accused Advance America of disguising predatory interest rates as monthly “participation fees” in order to circumvent Pennsylvania‘s consumer protection laws.

The fee was charged on Advance America’s Choice Line of Credit product, offered in Pennsylvania in 2006 and 2007.

Some of the loans had an effective annual interest rate of over 360 percent, the attorney general’s office said.

The action of the Attorney General followed an initial lawsuit by the Pennsylvania Department of Banking and Securities.

At the time, Advance America had as many as 100 offices in Pennsylvania, including two in Lancaster County. He no longer does business in the state.

The settlement “provides the closure of the outstanding Pennsylvania case since 2007 and eliminates lingering legal fees in a market where our company no longer operates,” said Advance America spokesperson Jamie Fulmer, in a press release.

Advance America’s records will be used to identify those eligible for restitution, the attorney general’s office said.

Settlement and refund inquiries can be directed to the Consumer Protection Bureau office at (800) 441-2555.