Earnin: DC Attorney General files lawsuit against EarnIn for decieving over 20,000 borrowers, providing high interest rates

WASHINGTON ( DC News Now ) - Washington D.C.'s Attorney General Brian Schwalb has filed a lawsuit against EarnIn for allegedly deceiving more than 20,000 loan borrowers. Schwalb announced the lawsuit against the company on Nov. 19 for deceptive marking, providing illegally high-interest loans, charging disclosed fees, and operating without a required lending license. ActiveHours Inc., which operates as EarnIn, is a fintech company that offers loans based on a percentage of pay that borrowers have earned, but not yet received from their employers. The company advertises on several social media platforms including YouTube, Snapchat, Facebook, Instagram, TikTok and more. Head of DC preschool faces federal charges in child exploitation investigation The Office of the Attorney General (OAG) alleges that the company violated the District law by falsely claiming that its "earned-wage" product, also known as "Cash Out," is not a loan and can be accessed instantly with "no mandatory fees" and "no interest." However, the OAG said the product is a loan and the consumer must pay a fee to receive the money immediately. The lawsuit states the app-lender base company advances the loan and then secures a repayment on the borrower's next payday. "EarnIn lures in hard-working, cash-strapped workers with the false promise of free instant cash advances, and then charges them unlawfully high interest," said Attorney General Schwalb. "This predatory business model is illegal. Especially at a time when the cost of living is already too high, my office will always have Washingtonians' backs. Today we're suing to hold EarnIn accountable and to put money back in District residents' pockets where it belongs." Officials said the average interest rate on an EarnIn instant "cash out" is over 300%, which is more than 12 times over D.C.'s 24% interest cap. The OAG said since 2016, over 20,000 DC Consumers have engaged in more than a million transactions with EarnIn. Copyright 2024 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. For the latest news, weather, sports, and streaming video, head to DC News Now | Washington, DC.