Consumer Financial Protection Bureau Files Lawsuit Against Driver Loan, LLC And Its CEO
November 05, 2020 / Source: CFPB
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today filed a lawsuit against Driver Loan, LLC, and its Chief Executive Officer, Angelo Jose Sarjeant, for allegedly engaging in deceptive acts or practices in taking deposits from and offering credit to consumers. Driver Loan, based in Doral, Florida, offers short-term, high-interest loans to consumers funded by deposits made by other consumers. The Bureau alleges that Driver Loan and Sarjeant violated the Consumer Financial Protection Act of 2010 (CFPA) by misrepresenting the risks associated with the deposit product it offered to consumers and by misrepresenting the annual percentage rate (APR) for extensions of credit it offered to other consumers.
The Bureau’s complaint, filed in the United States District Court for the Southern District of Florida, alleges that since 2017, Driver Loan purports to have offered short-term, high-interest personal loans totaling over $30 million, typically to drivers who work with ride-share companies. The loans range from $100 to $500 each and are repayable in 15 daily installments. The Bureau alleges that Driver Loan deceptively markets its loans as having an APR of 440% when the actual APRs are about 975%.
In 2020, Driver Loan began taking deposits from consumers to fund the loans it makes. Driver Loan claims to guarantee a 15% annual percentage yield on consumers’ deposits. It also claims to guarantee that consumers’ deposits are held at FDIC-insured institutions, which would protect against the loss of insured deposits. Driver Loan’s website also represents that a new consumer deposits funds with the company about every minute. The Bureau alleges that Driver Loan’s representations are false, as many consumers’ funds were not held in FDIC-insured accounts, the rate of return was not “guaranteed,” and other consumers were not rushing to deposit their funds with Driver Loan. The Bureau also alleges that most deposited funds are lent to borrowers at rates that violate Florida’s criminal-usury law, rendering the loans uncollectable and creating substantial risk that Driver Loan would not be able to collect delinquent loans or meet its obligations to consumers who sought to withdraw their deposited funds.
The Bureau seeks an injunction against Driver Loan and Sarjeant to stop their alleged unlawful conduct, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties.
The Bureau’s complaint is not a finding or ruling that Driver Loan, LLC or Angelo Jose Sarjeant has violated the law.
A copy of the complaint is available here: https://files.consumerfinance.gov/f/documents/cfpb_driver-loan-llc-angelo-jose-sarjeant_complaint_2020-11.pdf
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.
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