Pa. reaches $11 million settlement with 'predatory' rent-to-own lender
HARRISBURG, Pa. (KDKA) -- Some Pennsylvanians who used a lending company that allegedly preyed on low-income residents will get millions of dollars in restitution after a settlement.
The Pennsylvania Office of Attorney General announced on Monday that it settled a lawsuit filed against Snap Finance LLC and its affiliates for $11.4 million.
The attorney general's office said $7.3 million will go to consumers as cash restitution payments and another $3.15 million will go towards debt relief for consumers.
Snap entered into tens of thousands of rental-purchase agreements with Pennsylvania consumers since 2014, the attorney general's office said.
According to the lawsuit, the lending company preyed on low-income Pennsylvanians who couldn't make large purchases without financing and disguised one-year rent-to-own agreements as "100-Day Cash Payoffs."
The lawsuit alleged Snap misled consumers about the basics of binding agreements so consumers were signing 12-month agreements that included hefty leasing fees equivalent to 152% APR interest.
The attorney general's office said thousands of consumers will receive restitution and hundreds more will have their balances reduced to zero.
"This lender preyed upon Pennsylvanians who need to pay for big ticket, but necessary purchases over time," Attorney General Michelle Henry said in a news release. "The consumers were presented with short pay-back periods, but after signing on the dotted line, were instead locked into long-term, high-interest rate loans. If you mislead Pennsylvanians to maximize your bottom line, we will hold you accountable."
