Pennsylvania Attorney General Kathleen G. Kane recently filed a consumer protection lawsuit against Think Finance, a Texas-based company, for allegedly engineering an illegal payday loan scheme over the Internet.  The lawsuit, filed in the Court of Common Pleas of Philadelphia County, alleges that the company targets Philadelphia consumers in violation of state law. 

The suit alleges that Think Finance circumvents Pennsylvania laws that ban payday loans by using three Native American tribes, who function as the apparent lender, as a cover.  In turn, Think Finance earns significant revenues from various services it charges to the tribes.  The suit further alleges that before establishing these tribal partnerships, the company used the cover of a rogue bank based in Philadelphia, in what is commonly referred to as a “rent-a-bank” scheme, until the federal government shut down the bank.

The defendants are accused of violating several Pennsylvania laws, including the Unfair Trade Practices and Consumer Protection Law, the Corrupt Organizations Act, and the Fair Credit Extension Uniformity Act.

The lawsuit seeks injunctive relief to prohibit the defendants from violating Pennsylvania law, restitution for all consumers harmed by the scheme, civil penalties of up to $1,000 for each violation of Pennsylvania law, civil penalties of up to $3,000 for each violation involving a senior citizen, and notification to credit bureaus to remove all negative information related to the scheme and all references to any of the defendants from consumers’ credit reports.

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