Vermont Attorney General Bill Sorrell has sued four predatory lending companies on behalf of 1,600 Vermonters and settled with the businesses for $1 million.
The Vermont attorney general came to agreements with Western Sky/CashCall Inc., Government Employees Credit Center Inc., Sure Advantage LLC and T$$$ LLC. Sorrell says he is also pursuing lending violations that have been perpetrated by PBT Loan Services, Cash in a Wink and Intercept Corp.
Sorrell says the victims of the predatory lending schemes will receive checks or direct credits to their bank accounts over the next three to six months.
Sorrell estimates that 5,000 to 8,000 Vermonters have borrowed from so-called "payday" online lenders since 2009. The average loan amount is $375, and many Vermonters have multiple loans.
The lawsuits were possible because the Vermont Legislature passed legislation last year that cracks down on predatory lending. Under state statute, the attorney general can go after third party loan processors.
Only 15 states restrict payday loans; Vermont has banned payday loans and limits annual interest rates, including fees, at 12 percent to 24 percent, according to a fact sheet from the Attorney General's Office.
There are 81 illegal lenders that have conducted business in Vermont, Sorrell said, and many of them are online or advertise in local media outlets.
His office this week sent letters to broadcasters, cable and satellite TV companies, and online search engine companies to stop hosting ads for illegal lenders.
Both Sorrell and Susan Donegan, the commissioner of the Department of Financial Regulation, urged Vermonters to file complaints with the state when they hear about loan deals that sound too good to be true.
Donegan said lenders must be licensed with the state, and if consumers are worried about whether a company is legitimate, they can call the banking division of her department with complaints.
"Give us a call. Come forward. Because we can help," Donegan said.