A company that services online loans made to consumers has agreed to pay $1.6 million in a settlement with the Attorney General of Massachusetts after it was accused of using abusive debt collections that violated state regulations.
The company, Avant, was accused of making excessive telephone calls to individuals with unpaid debts and of failing to advise individuals that they could request more documentation related to their underlying loans.
“Our debt collection regulations are in place to protect consumers from abusive and illegal practices by companies like Avant,” said Maura Healey, the Attorney General of Massachusetts, in a statement. “This settlement will provide money to aid consumers who are harmed by deceptive and unfair practices.”
This is the second settlement that Avant has reached with regulators relating to its debt collection practices. Back in 2019, it reached a settlement with the Federal Trade Commission after it was accused of withdrawing payments for loans from the bank accounts of customers or charging their credit cards without obtaining the proper permission to do so. Avant refunded nearly $4 million back to consumers as part of that settlement.
In this case, Avant was accused of exceeding state regulations in Massachusetts that limit collectors to two phone calls during a seven-day period. The company was also accused of violating state regulations that require creditors to advise individuals that they have a right to certain documents that confirm the validity of the underlying loans, including any agreement bearing the individual’s signature.
The AG’s investigation, which dates back to 2015 according to a published report, uncovered thousands of potential violations.
Along with paying the fine, which will be used to fund local consumer programs throughout Massachusetts, the company agreed to follow state regulations moving forward. Avant neither admitted nor denied the accusations as part of the settlement. The company also fully and voluntarily cooperated with the AG’s investigation.
