CFPB Redress for Consumers Harmed by Think Finance
How the CFPB is returning more than $384 million to borrowers misled into repaying loans they did not legally owe.
The Consumer Financial Protection Bureau (CFPB) is distributing more than $384 million to consumers that it alleges were misled by Think Finance, LLC and related entities into repaying loans they did not legally owe. This large-scale redress follows years of enforcement activity against the company’s high-cost online lending model and its violations of state and federal consumer protection laws.
Background: Who Was Think Finance and What Did It Do?
Think Finance, LLC and six subsidiaries managed and serviced online installment loans and lines of credit offered through three lenders: Mobiloans, Great Plains Lending, and Plain Green Lending. These products were marketed nationwide over the internet, frequently to consumers with limited access to traditional credit.
The CFPB alleged that Think Finance’s business model relied on collecting payments on loans that were void or uncollectable under the laws of at least 17 states due to interest rate caps and state licensing requirements.
States Where Loans Were Alleged to Be Illegal
According to the CFPB’s lawsuit, loans connected to Think Finance were illegal, void, or not collectible under the laws of the following states:
- Arizona
- Arkansas
- Colorado
- Connecticut
- Illinois
- Indiana
- Kentucky
- Massachusetts
- Minnesota
- Montana
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Ohio
- South Dakota
Why the Loans Were Considered Illegal
Many states impose interest rate caps and require lenders and collectors to hold specific licenses before doing business with residents. If these requirements are violated, state law may treat the loan as:
- Completely void (no obligation to repay principal or interest)
- Partially void (for example, interest is void but principal may still be owed)
- Uncollectable, meaning a lender or collector cannot legally enforce repayment
The CFPB alleged that Think Finance and its affiliates continued to demand and receive payments on loans even where state law made those debts invalid or uncollectable. The Bureau also alleged that Think Finance worked with tribal-affiliated lenders in a way that attempted to sidestep state interest rate caps and licensing rules.
The Future of AI: Preventing a Big Tech Monopoly >
| Issue | Typical State Requirement | CFPB Allegation Against Think Finance |
|---|---|---|
| Interest rate limits | Rates above a specified cap render the loan partially or fully void. | Collected on loans with interest rates that exceeded state caps in affected states. |
| Lender licensing | Lenders and collectors must be licensed to operate in the state. | Collected on loans where the lender or collector lacked proper state licensing. |
| Debt collection practices | Demands must be based on legally owed debts. | Made payment demands and withdrawals on debts consumers had no legal obligation to pay. |
How Think Finance Allegedly Harmed Consumers
The CFPB’s lawsuit alleged that Think Finance and its subsidiaries engaged in unfair, deceptive, and abusive acts and practices, in violation of the Consumer Financial Protection Act. Core allegations included:
- False payment demands: Telling consumers they owed money on loans that were void or uncollectable under state law.
- Unauthorized or unlawful withdrawals: Initiating electronic debits from consumers’ bank accounts for debts they did not legally owe.
- Providing substantial assistance: Aiding third-party debt collectors in collecting illegal loans.
- Misrepresenting enforceability: Creating the impression that consumers were obligated to pay, even when state law said otherwise.
In practice, this meant that affected borrowers could have:
- Paid hundreds or thousands of dollars on loans that should not have been collected
- Faced bank fees due to repeated debit attempts
- Experienced damaged credit or collection harassment based on invalid debts
CFPB Enforcement and Legal Actions
The CFPB filed a lawsuit in federal court in 2017 against Think Finance and its subsidiaries. The Bureau alleged widespread violations associated with the illegal collection of void or uncollectable loans and the assistance provided to third-party collectors.
Key Enforcement Milestones
- 2017: CFPB files its lawsuit against Think Finance and six subsidiaries.
- 2020: A stipulated final consent order is entered, resolving the CFPB’s lawsuit against the Think Finance entities.
- Bankruptcy proceedings: The consent order formed part of a broader bankruptcy resolution, alongside settlements with a state attorney general and private class action litigants.
- Redress fund: The global resolution created a fund to provide consumer redress, while the CFPB’s Civil Penalty Fund later added substantial compensation for affected borrowers.
What the Consent Order Requires
Under the court-approved consent order, the Think Finance entities were:
- Prohibited from offering or collecting loans in the 17 identified states if the loans violate state lending laws
- Barred from assisting others in the offering or collection of such unlawful loans
- Assessed a nominal civil money penalty of $1 per entity (seven entities total), enabling eligibility for Civil Penalty Fund distributions to victims
The Role of the CFPB Civil Penalty Fund
The CFPB’s Civil Penalty Fund aggregates civil penalties collected from lawbreakers and uses those funds to compensate victims of financial misconduct when direct restitution is unavailable or insufficient. According to the CFPB, the Fund can provide payments even where the responsible company has limited assets or has entered bankruptcy.
In the Think Finance matter, the CFPB allocated more than $384 million from the Civil Penalty Fund to provide redress to affected consumers beyond what was available from the company’s own assets and related settlements.
Who Will Receive Payments?
According to CFPB information and related public reporting, the more than $384 million in relief will be distributed to approximately 191,000 consumers who were harmed by Think Finance’s conduct. The affected consumers generally include individuals who:
- Obtained loans or lines of credit associated with Think Finance’s managed lenders, such as Mobiloans, Great Plains Lending, or Plain Green Lending
- Made payments on loans that were void or uncollectable in one of the 17 identified states
- Had bank accounts debited or were pressured to pay on debts they did not legally owe
What Consumers Should Know If They May Be Eligible
The CFPB typically works with a designated third-party administrator to process payments in large redress distributions. For each enforcement case, the Bureau provides case-specific information on its website, including eligibility criteria, payment status, and where to direct questions.
How the Payment Process Typically Works
Although details may vary by case, CFPB-administered redress programs commonly involve the following steps:
- The CFPB identifies consumers eligible for payment using the defendants’ records, prior settlement data, or other verified sources.
- A settlement or claims administrator mails checks to eligible consumers at their last known address, or initiates electronic payments where possible.
- Notices may include instructions on how to update contact information or reissue a check if it is lost or expired.
- Consumers do not need to pay fees or provide bank account passwords to receive CFPB redress.
Protecting Yourself From Related Scams
Large, well-publicized settlements sometimes attract scammers who try to impersonate government agencies.
- The CFPB does not charge a fee to send redress payments.
- Legitimate communications will not ask for sensitive information such as full bank passwords or payment to “unlock” a refund.
- Consumers can verify information about payments directly on the CFPB’s official site and, for some cases, on a dedicated settlement website linked there.
Lessons for Borrowers: Understanding High-Cost Online Loans
The Think Finance case illustrates the risks associated with certain high-cost online loans, particularly those offered by companies that claim not to be subject to state interest rate or licensing laws.
Red Flags to Watch For
- Very high annual percentage rates (APRs): Rates far above typical credit card APRs may violate interest rate caps in some states.
- Complex or unclear loan terms: Difficulty determining the total cost of the loan or the schedule of payments.
- Unlicensed lenders: Lenders that do not appear in state licensing databases.
- Claims of immunity from state law: References to tribal or offshore status used to suggest that state protections do not apply.
Steps Consumers Can Take Before Borrowing
Before taking out an online loan, consumers can:
- Check their state regulator’s website for information on interest rate limits and licensing.
- Verify that the lender is properly licensed to operate in their state.
- Compare the cost to alternative forms of credit, such as credit unions or low-cost small-dollar loan programs where available.
- Review CFPB and state attorney general alerts regarding problematic lenders or products.
Frequently Asked Questions (FAQs)
Q1: Why is the CFPB distributing more than $384 million related to Think Finance?
The CFPB is using its Civil Penalty Fund to distribute over $384 million in redress to consumers that it alleges were deceived into repaying loans they did not legally owe, because the loans were void or uncollectable under the laws of 17 states.
Q2: How do I know if I am eligible for a payment?
Eligibility depends on whether you had a loan or line of credit connected to Think Finance’s managed lenders and made payments on loans that were illegal or uncollectable under state law. The CFPB provides case-specific eligibility information on its enforcement payments page and related case page for CFPB v. Think Finance, LLC.
Q3: Do I need to file a claim to receive money from the CFPB?
In many CFPB cases, eligible consumers are identified automatically from company records or prior settlements, and checks are mailed without requiring a claim form. However, any specific instructions for this case will be listed on the CFPB’s official case page for Think Finance.
Q4: Can I still be sued or contacted about a Think Finance-related loan?
The CFPB’s lawsuit alleges that certain Think Finance-related loans in 17 states are illegal, void, or uncollectable, and the consent order prohibits the defendants from collecting loans that violate those state laws. If you receive collection attempts on such loans, you may wish to contact a lawyer or your state attorney general’s office to understand your rights.
Q5: Where can I get official information about payments?
You can find official information on the CFPB’s enforcement “Payments to harmed consumers” page and the specific case page for CFPB v. Think Finance, LLC. These pages list payment status, administrator contact information, and updates about consumer redress.
References
- Consumer Financial Protection Bureau Settles Lawsuit Against Think Finance, LLC and Six Subsidiaries — Consumer Financial Protection Bureau. 2020-02-05. https://www.consumerfinance.gov/about-us/newsroom/cfpb-settles-lawsuit-against-think-finance-entities/
- The CFPB will distribute more than $384 million to consumers deceived by Think Finance, LLC — Consumer Financial Protection Bureau. 2023-XX-XX. https://www.consumerfinance.gov/about-us/blog/the-cfpb-will-distribute-more-than-384-million-to-consumers-deceived-by-think-finance-llc/
- Think Finance, LLC (formerly known as Think Finance, Inc.) — Consumer Financial Protection Bureau. 2020-02-06. https://www.consumerfinance.gov/enforcement/actions/think-finance-llc-formerly-known-think-finance-inc/
- CFPB v. Think Finance, LLC — Consumer Financial Protection Bureau. 2023-XX-XX. https://www.consumerfinance.gov/enforcement/payments-harmed-consumers/payments-by-case/thinkfinance/
- Civil Penalty Fund — Consumer Financial Protection Bureau. 2023-XX-XX. https://www.consumerfinance.gov/enforcement/payments-harmed-consumers/civil-penalty-fund/
- Victims of Think Finance loan repayment scam to get $384 million — CBS News. 2023-XX-XX. https://www.cbsnews.com/news/refund-scam-cfpb-think-finance-loan-repayment-victims/
Similar Articles
Read full bio of medha deb
