Payday loan company forgives debt in Mont. lawsuit
A Kansas-based internet payday loan company has reached a settlement and agreed to forgive hundreds of thousands of dollars in debt in a Montana class action lawsuit.
The case began in 2011 when Tiffany Kelker of Billings sued over a $500 loan. She had paid more than $2,100 to LoanPoint USA over six months, but still owed the original $500.
Attorney John Heenan says Kelker was paying 800 to 1,000 percent annual interest. Montana law caps the rate at 36 percent. More than 400 people joined the lawsuit.
The Billings Gazette reports that under the settlement approved Wednesday, LoanPoint agreed to forgive the outstanding balances for those involved in the lawsuit. The 335 borrowers who repaid LoanPoint will share in a $233,000 settlement.
Heenan says other states have settled similar cases with LoanPoint.
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