Too Often, Financial Scams Target Residents Who Are Already Struggling. We’re Fighting Back.
Sadly, it’s a fact of life that it often costs money not to have money. And DC is unfortunately no exception. Even here in the District, bad actors are targeting residents with the least financial resources, hitting them with hidden fees, high-interest loans, or even higher costs for services.
It makes my blood boil when I see companies preying on DC residents — especially when they make a calculated choice to go after residents who don’t have the resources to challenge the exploitation, or simply don’t have the ability to go elsewhere for fair service. Not only is it immoral, it’s illegal.
We have taken action to stand up for low-income residents. Here are just a few examples:
Fast Cash: Liberty Tax
We sued Liberty Tax, one of the biggest tax preparation companies in the country, for secretly increasing prices for consumers who took them up on their $50 “cash in a flash” offer. The company heavily advertises this program as a way to get fast cash — it’s on their website, their videos, on signs located in primarily lower-income neighborhoods (with phrases like “GET $50 NOW”). The truth is that Liberty Tax charges more — anywhere from $67 to $200 — if you accept the $50 “cash in a flash” offer.
All of Liberty Tax’s locations are in or near an area of the district with lower median incomes, which makes their scheme plain: Liberty Tax is swindling low-income residents by handing them cash with one hand, but stealing it back — and charging them extra — with the other.
Our lawsuit against Liberty Tax is ongoing.
Predatory Lenders: Opportunity Financial and Elevate
Predatory lenders make their money by lending to consumers with below-average credit and then trapping them in cycles of debt. Last year, we sued OppFi, one of these notorious predatory lenders, for misrepresenting its high interest loans as fast and easy cash and falsely claiming that its loans would help struggling consumers build credit. OppFi charged over 4,000 District residents exorbitant interest rates of up to 198% — which is more than eight times the District’s 24% interest rate cap. We sued to put an end to OppFi’s false promises and illegal interest rates that gouge low-income consumers. Last November, we secured $1.5 million in refunds for DC consumers.
In 2020, we filed a similar lawsuit against another predatory lender called Elevate, which charged DC residents interest rates up to 42 times high than DC’s legal limit. In that lawsuit, we secured at least $3.3 million in restitution to pay back DC residents, and we forced Elevate to stop charging these illegally high rates.
Overdraft Fees
Overdraft fees are another scheme that hit low-income residents hardest. Along with other AGs, we’ve called on banks to end the practice of charging fees when your bank account dips below zero — even if your balance shows up positive. These fees make banks billions of dollars a year, hitting consumers when they’re down.
Overdraft fees and other junk fees really add up:
I’m glad that President Biden recently issued guidance advising that junk fees and overdraft fees are likely illegal. My office will continue to take action to stop companies from secretly charging consumers fees they may not be able to afford, just like we did with Marriott’s bogus resort fees.
How We Advocate for Vulnerable Residents
Cracking down on financial exploitation is just one of the ways we stand up for vulnerable DC residents. We bring lawsuits to protect elderly residents from fraud, workers from wage theft, and tenants from slumlords. We also relentlessly stand up against discrimination, whether that occurs in the voting booth or on apartment listings. And we fight for accountability from polluters, seek opportunities to lift up DC youth, advocate for relief for residents who have been burdened by student debt by predatory colleges, and much, much more.
You can help spread the word about financial scams and let us know if you see predatory schemes of any kind. Contact our Office of Consumer Protection, by doing any of the following:
· Texting (202) 738–5212
· Messaging OAG using the chat feature at: oag.dc.gov/consumer
· Submitting a complaint online at: https://oag.dc.gov/consumer-protection/submit-consumer-complaint
· Calling (202) 442–9828
· Emailing consumer.protection@dc.gov
