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Vermont Going After Illegal Lenders

Thousands, if not millions of dollars, are going back into Vermonter's pockets.
MONTPELIER, Vt. - Thousands, if not millions of dollars, are going back into Vermonter's pockets.
    
If you get a letter from the Vermont Attorney General's office in the next couple months, you definitely want to open it. More than 1,000 Vermonters will receive either direct checks in the mail, or credits to their bank accounts from interest and fees they've paid to illegal lenders. 

Rhonda Wood says when her husband went on disability in 2010, his income went down to 60 percent and they needed money to pay the bills.

"Watching TV one day I saw an advertisement come on about Western Sky's, call this number so I did," Wood said.

She says Western Sky called her back within minutes, saying she qualified for a $2,600 loan.

"Halfway through I was informed this loan would cost me $7,850 dollars in interest. I paid the loan off in 2013, so do the math, about $15,000 dollars in interest."

The Vermont Attorney General's Office has identified 81 illegal lenders doing business in Vermont.

"We are announcing today, that we have sued and resolved with 3 of the lenders, lawsuits for violating our laws," Vermont Attorney General Bill Sorrell said.

Sorrell says up to 8,000 Vermonters, like Wood, have borrowed from illegal internet lenders in the past 5 years, most commonly called Payday Loans.

The interest rate is extremely high Sorrell says on average around 300 percent. Now, some of those borrowers could get a chunk of up to an estimated $1 million.

"Those who still have outstanding loans, what they owe goes away, and for those we've settled with, so far they're going to get either all or the lionshare of the interest and fees they paid on these loans which could be thousands of dollars per borrower," Sorrell said.

Thanks to a fairly new state law, Vermont can go after the companies who also assist lenders in processing the payments.

"The one loan processor that we settled with was processing loan for 29 different illegal lenders, so the beauty of the Vermont statute is we can go at the processors, the otherwise legitimate businesses that are facilitating the payments from the borrowers to the illegal lenders." 

The Attorney General's Office has sent out letters to the 76 illegal lenders. They have 30 days to comply with Vermont law. 

To file a complaint visit the Vermont Attorney General's website.

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