MONTPELIER -- Vermont attorney general William Sorrell says the state is cracking down on the growing problem of illegal online lending.
Sorrell says lenders are taking advantage of thousands of low and moderate income Vermonters by offering illegal short-term, high-interest loans over the Internet. He says the loans -- with an average interest of 300 percent -- are designed to entrap consumers in long-term debt.
But Sorrell said Wednesday that Vermont has strict lending laws to fight such schemes.
State laws require non-bank lenders to be licensed and limit annual interest rate on unsecured loans to 12-to-24 percent.
Sorrell says settlements with the top three largest known lenders and one payment processor have resulted in at least $1 million in potential refunds and loan forgiveness to over 1,600 eligible Vermont consumers.