Intercept Corporation, a North Dakota company that processes electronic payments, will pay $75,000 to Vermont consumers and pay the State of Vermont $10,000 to settle claims that the company violated Vermont consumer protection laws. “Vermont currently has the strongest law in the nation to combat predatory high-interest, unlicensed loans – loans that historically were called payday loans,” said Attorney General William H Sorrell. “Our consumer protection law makes payment processors and others who assist illegal lenders directly responsible for the harms caused by illegal loans. This is the second settlement against a payment processor and a further warning to those who assist illegal lenders.” More information on illegal lending and the Attorney General’s efforts can be found here.
Between 2012-2013, Intercept Corporation processed debits from over 1,000 consumer bank accounts in Vermont on behalf of at least 26 online lenders of high-interest loans. The annual interest often exceeded 100-300% even though Vermont law prohibits annual interest above 24%. None of the 26 lenders had a license to make loans in Vermont. As of August 2013, Intercept ceased processing payments in Vermont involving any online consumer loans.
Under the terms of the settlement, Intercept will: (1) issue a credit of $74.78 to each of 1,003 Vermont bank accounts for a total of approximately $75,000; (2) pay $10,000 in civil penalties and costs to the State; and (3) assist the Attorney General’s efforts to address unlicensed lending in Vermont. The $74.78 credit represents the total of $75,000 divided by 1,003 bank accounts that the State and Intercept agreed would be repaid to those consumer bank accounts that were debited more than they were credited by Intercept. The $75,000 represents partial compensation for payment of interest over Vermont’s legal limit.
Consumers who believe they may be eligible for the approximate $75 credit payment from Intercept should check Exhibit A in the settlement, to see if their lender is one of the 26 lenders listed. Consumers who believe they are entitled to more than the credit may refuse the credit and instead pursue their own claim directly against Intercept or their lender. For more information contact the Attorney General’s Office at [email protected] or 802-656-3183.
Consumers who have borrowed from a lender not listed on Exhibit A, and who have obtained loans from any lender not listed as licensed with the Vermont Department of Financial Regulation can file a complaintwith the Attorney General’s Consumer Assistance Program, or mail a complaint to “Consumer Assistance Program,” 146 University Place, Burlington, VT 05405.
Vermont Attorney General: Oct 2, 2014