Kentucky attorney general joins $644 million multi-state settlement with predatory lender

FRANKFORT, Ky. – Attorney General Russell Coleman has joined 16 other attorneys general in a nearly $664 million settlement with Snap Finance, officials say.

According to the attorney general’s office on Thursday, as part of the settlement, Snap Finance will automatically cancel over $12.3 million in lease payments owed by Kentuckians who entered into lease-to-own agreements from 2017 to 2022.

Borrowers will also get to keep and own their merchandise with no further payments, officials say.

Kentucky will also receive $150,000 in payment from the company, according to Coleman’s office.

According to the attorney general, Snap Finance “violated Kentucky’s consumer protection laws by not allowing customers to view the full terms of their contracts, misinforming borrowers that making on-time payments would increase their credit score and entering customers into long-term contracts when initially framing them as 100-days or fewer pay-back windows.”

“Customers have the right to know what they’re getting into before making a potentially life-altering financial decision,” said Coleman. “Our Office will always stand against predatory businesses to protect Kentuckians’ hard-earned dollars.”

In addition to lease forgiveness and payments, Snap Finance also agreed to change their business practices to address the Coalition’s concerns, according to officials:

• Advertising restrictions: Snap has agreed to not use misleading slogans such as “cash payoff,” “same as cash,” and “no additional fees required,” that potentially hid the true cost of the lease a customer was agreeing to.
• Disclosure and transparency: Snap must ensure that customers are shown the full terms and cost of a lease in accordance with state law before the lease can be signed.
• Servicing protections: The settlement makes it clear when Snap must repair or replace property that a customer leases and ensures Snap will do so. Additionally, Snap is prohibited from threatening seizure of a product for non-payment of a lease when it has no intent to do so.
• Disclosures about credit ratings: Snap is prohibited from misrepresenting that applying for a lease or utilizing Snap’s LTO product will help customers increase their credit score.
• Lease termination and surrender: Snap is required to provide clear disclosure of the right to terminate a lease, and Snap is prohibited from interfering with that right. Additionally, the settlement requires practical ways for a customer to return property when terminating a lease while pausing payment accrual when termination requests are processed.
  Merchant training and Compliance: Snap must meet certain initial and ongoing training requirements and provide annual compliance reports for three years.

Kentucky joined the Iowa and Nebraska led settlement along with Arkansas, Florida, Georgia, Idaho, Kansas, Louisiana, Mississippi, Missouri, North Dakota, Oklahoma, Texas, Utah, West Virginia and Wyoming, officials say.

Read the full settlement here.