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Class Action Lawsuit Filed Alleges Pay Day Loan Company Violated the Wisconsin Consumer Act
MADISON - 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, have reached a preliminary settlement in a class action lawsuit against an internet payday loan company, Arrowhead Investments, LLC. The lawsuit alleged, among other things, that this company violated the Wisconsin Consumer Act in the issuance of internet payday loans to Wisconsin consumers.
On July 29 2009, the Honorable Maryann Sumi of the Dane County Circuit Court entered an order preliminarily approving a settlement agreement ("Agreement") entered into by parties in this case. The Agreement requires significant injunctive relief and a cash payment of $180,000, which will be used to pay restitution to consumers, forfeitures, attorneys fees and costs. Approximately 1300 potential consumers will receive relief from this agreement. Specifically, Wisconsin consumers who received a loan from Arrowhead Investments, LLC between December 1, 2001 and December 21, 2007, and who paid more than their principal loan amount to Arrowhead, will receive a cash payment. In addition, the Agreement allows for injunctive relief, including:
A Fairness Hearing has been scheduled for February 12, 2010.
Class members are not required to attend the hearing. A copy of the Consent
The class action complaint was filed by the Consumer Law Litigation Clinic, which has been named Class Counsel in this litigation. The State of Wisconsin joined the lawsuit, filing a complaint seeking forfeitures to enforce the Wisconsin Consumer Act. The suit alleged that Arrowhead Investments, LLC's loan contracts violated certain provisions of the Wisconsin Consumer Act and Wisconsin common law unconscionability. Arrowhead Investments, LLC denied all these allegations and has not admitted any liability in this matter. The Court has not ruled on the merits of any of the claims involved in this lawsuit.
The State is being represented by Assistant Attorney General Lara Sutherlin. The State Department of Financial Institutions is also assisting in this case.
If you believe you could be a member of this class and you have any questions about the class settlement, please contact the Consumer Law Clinic at (608) 263-6283.