When you’re submitting an application to get a debt collection license in Massachusetts, make sure you’re not disclosing information that state regulators are going to use against you. Online lending company Avant is learning that lesson the hard way, after disclosing in a debt collection license application that it was making small dollar loans. Maybe not such a big deal in and of itself, but back in 2021, the company entered into an Assurance of Discontinuance after being accused of violating the state’s debt collection regulations, and promised that it would not engage in any other activity without first obtaining the proper license to do so. The mistake is going to cost Avant $555,000 in fines while also being forced to reimburse any consumer with an interest rate in excess of 12%.
A copy of the enforcement order can be accessed by clicking here.
In 2021, Avant agreed to pay a $1.6 million fine after it 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.
A few months later, Avant submitted an application to obtain a debt collection license in Massachusetts. When reviewing that application, the state’s Division of Banks learned that the company was making small loans without having a license to do so. In February 2022, the company withdrew its application for a debt collection license.
Along with paying the fine, and reimbursing consumers with interest rates above 12%, Avant also said it will not engage in any business activity in the state in the future prior to obtaining the appropriate license or approval from the Division.
