ST PAUL, Minn. — Editor's note: The video above first aired on Oct. 20, 2023.
The office of Minnesota Attorney General Keith Ellison has filed a lawsuit against an internet loan group alleging predatory lending practices and violations of state law.
A news release sent out Wednesday details the allegations against an entity known as the Island Mountain Development Group, made up of several companies including Bright Lending, Green Trust Cash and Target Cash Now.
In the lawsuit, Ellison details the cases of 45 individual consumers who signed up for small cash loans, only to find out they had to repay "exorbitant and unaffordable" sums that in some cases amounted to between 400 and 800 percent annual interest.
Here are some of the cases the AG included.
- A woman from Oakdale says she received a $700 loan from Bright Lending and made five payments of roughly $423 each on that loan. After paying over $2,000 on a $700 loan, she was reportedly told by Bright Lending that the majority of her payments had gone towards covering the loan’s interest and that she still owed them money.
- A borrower from Minneapolis was given $800 by Bright Lending and is now expected to repay it in 22 installments of $200.12 each, amounting to $4,400.00 for an $800 loan. "That's 699.9856% interest and $400.00 per month. I don't understand how this is legal. Payments of $400.00 per month in addition to my medical bills which I'm paying, will very well bankrupt me,” the borrower said.
- Another Minneapolis resident admits to making "a stupid mistake" by borrowing $1,200 from Target Cash Now during the pandemic at an interest rate of 499.94%. Repaying the loan will include $3,880.90 in interest, which will be a significant financial hardship for that person.
“As Attorney General, it’s my job to protect consumers and legitimate businesses from businesses that break the law and take advantage of people who take desperate measures to afford their lives,” Ellison said in the news release. “These businesses have been engaging in the worst kind of predatory lending and I’m glad to bring this lawsuit to stop the harm they are causing and help people afford their lives. Let this serve as a warning to any other businesses charging these illegal and outrageous interest rates: if you break the law and cheat the people of Minnesota, we will put a stop to it and hold you accountable.”
While the full reach of the defendants’ lending is not yet known, the investigation by Ellison's office obtained information from a debt collector showing that 634 loans issued by the defendants were in default and referred to collections from 2018 to 2022, with balances totaling over $608,000.
Consumers who have taken out loans from Bright Lending, Target Cash Now and Green Trust Cash in Minnesota can contact the Attorney General’s Office by calling (651) 296-3353 in the Twin Cities metro or (800) 657-3787 in Greater Minnesota.
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