Arrowhead Investments LLC, a provider of pay day loans over the Internet, has agreed to zero-out all loans to Wisconsin customers and pay $180,000 in restitution and costs to settle allegations of consumer law violations.
The company reached the preliminary agreement with the Consumer Law Litigation Clinic at the University of Wisconsin Law School and the Wisconsin Department of Justice, on behalf of the Wisconsin Department of Financial Institutions. The class-action lawsuit was filed by the Consumer Law Litigation Clinic, which alleged that Arrowhead’s loan contracts violated certain provisions of the Wisconsin Consumer Act and Wisconsin common law unconscionability. Arrowhead Investments denied the allegations and has not admitted any liability in this matter.
The Justice Department said approximately 1,300 consumers could receive relief. The settlement covers Wisconsin consumers who received a loan from Arrowhead Investments between Dec. 1, 2001, and Dec. 21, 2007, and who paid more than their principal loan amount to Arrowhead. They will receive a cash payment.
Arrowhead will also close all outstanding loans with a zero balance, totaling more than $432,000 in loan, cost and fee forgiveness, and also agreed to no longer solicit loans to Wisconsin consumers for five years, among other settlement provisions.
