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MADISON - In the fall of 2008, 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, filed 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 entered into by parties in this case. After providing notice of the terms of the settlement to 1,271 class members, the Court held a final fairness hearing today, allowing for any objections to the settlement to be heard. Hearing none, the Court entered a Final Order and Judgment requiring significant injunctive relief and a cash payment of $180,000, which will be used to pay restitution to consumers, forfeitures, attorneys fees and costs. 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:
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, LLCs 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 was represented by Assistant Attorney General Lara Sutherlin. The State Department of Financial Institutions also assisted in this case.