fb-pixel Skip to main content
THE FINE PRINT

AG gets $1.6m settlement with debt collection company over its practices

The settlement with Avant, filed in court on Tuesday, was negotiated by Attorney General Maura Healey.
The settlement with Avant, filed in court on Tuesday, was negotiated by Attorney General Maura Healey.Steven Senne/Associated Press

Avant, a Chicago-based company that services online loans to consumers, has agreed to pay the state $1.6 million to settle allegations that it used abusive debt collection practices against consumers.

The settlement, filed in court on Tuesday, was negotiated by Attorney General Maura Healey after investigators in her office spent several years investigating the company’s practices.

The investigators accused Avant of making excessive telephone calls to debtors and failing to advise debtors of their right to receive detailed documentation of their loans, saying both practices violated state debt collection regulations.

The state’s debt collection regulations are among the strictest in the nation, and the settlement is one of the largest of its kind.

Advertisement



“Our debt collection regulations are in place to protect consumers from abusive and illegal practices by companies like Avant,” Healey said in a statement. “This settlement will provide money to aid consumers who are harmed by deceptive and unfair practices.”

An Avant spokeswoman called the settlement “a mutually agreeable resolution.”

“We are pleased that this matter is resolved and remain focused on providing customers with transparent access to credit that simplifies their journey to financial health,” she said in an e-mail to the Globe.

The investigation, which dates back to 2015, was initiated after consumers complained to the attorney general’s office. When investigators examined the company’s records, they discovered evidence of thousands of violations, the attorney general’s office said.

State regulations restrict the number of calls creditors can make to debtors to no more than two in any seven-day period.

“Avant would pursue its customers with collection calls and letters, doing so thousands of times in the period investigated, often calling a debtor’s residence, cellphone, or other personal phone more than twice in a seven-day period,” the attorney general’s office said in a statement.

The attorney general’s office also alleged Avant, prior to 2018, violated state regulations that require creditors to advise debtors they have a right to documentation verifying their debt, including any agreement that bears the debtor’s signature, and an accounting of the date and amount of payments, credits, balances, and charges on the debt.

Advertisement



The company “fully and voluntarily” cooperated with the attorney general’s office, including by providing documentary material, according to the attorney general’s office.

Avant, an online loan servicer for short-term installment loans, “neither admits or denies” the attorney general’s allegations, according to the 11-page settlement document filed in Suffolk Superior Court.

The terms of the settlement include assurances from Avant that it will abide by state regulations. Avant “represents that it independently corrected” the conduct alleged by the attorney general’s office, according to the settlement.

The settlement was applauded by April Kuehnhoff, a staff attorney for the Boston-based National Consumer Law Center.

“Call frequency is among the top reasons for consumer complaints about debt collection,” she said. “Massachusetts is one of a handful of state and local governments that have imposed limits on collection calls.”

State regulations also set limits on calls to a debtor’s workplace and the time of day the calls can be made.

The attorney general’s office made a similar settlement in 2016 with Ditech Financial, a national mortgage servicer which previously operated as GreenTree, according to an attorney general’s press release dated in 2016.

Ditech agreed to pay the state $1.4 million for its alleged abusive debt collection practices, including excessive telephone calls to borrowers and failure to advise them of their right to documentation of their debt, according to the press release.

Advertisement



The $1.6 million in payment from Avant will be used to fund local consumer programs throughout the state. Those community-based programs, which work with the attorney general’s office, provide free information and mediation to consumers.





Got a problem? Send your consumer issue to sean.murphy@globe.com. Follow him on Twitter @spmurphyboston.