A settlement providing for a $180,000 cash payment by Internet payday lender Arrowhead Investments, Inc., for restitution to consumers, forfeitures, attorneys fees and costs, was approved preliminarily in Dane County Circuit Court on July 29, 2009, as a result of a class action lawsuit brought against Arrowhead by the University of Wisconsin Law School Consumer Law Litigation Clinic, joined by the Wisconsin Department of Justice on behalf of the Wisconsin Department of Financial Institutions.
Approximately 1300 Wisconsin residents received a loan from Arrowhead Investments Inc. between December 1, 2001 and December 21, 2007. Potential class members will be notified by mail.
As part of the settlement, Arrowhead Investments will refrain from lending to Wisconsin consumers for five years. All loans with an amount currently owed will be closed with a zero balance, and those who paid more than their principal loan amount will receive a cash payment.
The Consumer Law Litigation Clinic, which was named Class Counsel in the lawsuit, alleges that Arrowhead Investment's loan contracts violated certain provisions of the Wisconsin Consumer Act and Wisconsin common law. Arrowhead denies all allegations and has not admitted any liability in this matter, and the Court has not ruled on the merits of any of the claims asserted.
Attorney and Clinical Instructor Sarah Orr, Director of the Consumer Law Litigation Clinic, comments, “Wisconsin consumers will truly benefit from this significant settlement. Arrowhead’s Wisconsin customers will be able to move on with their lives, and Wisconsin consumers as a whole will be better protected.”
A Fairness Hearing is scheduled to take place before Judge Maryann Sumi at the Dane County Circuit Court on February 12, 2010, at 1:15 p.m. Class members are not required to attend the Fairness Hearing.
Established in 1991, the University of Wisconsin Law School Consumer Law Litigation Clinic is committed to three primary purposes: (1) pedagogy, by training law students in all aspects of civil litigation; (2) client service, by representing individuals and groups unable to obtain private counsel; and (3) public interest advocacy, by working on cases which present the opportunity to shape the law in ways that will benefit consumers in the future. Since its inception, the Clinic has provided legal services to lower income clients while providing law students the opportunity for hands-on training.
The Clinic handles individual and class action lawsuits in state and federal courts covering a variety of consumer protection issues, including misrepresentation and fraud, credit scams, predatory lending, unfair debt collection practices, and “fringe banking” abuses by rent-to-own and payday loan companies. The Clinic also advocates for consumers before the Wisconsin Legislature and administrative agencies, and provides community-based outreach and education on consumer issues.
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