If you are paying more than 16% interest on an Upgrade or Prosper personal loan, contact our consumer protection attorneys today.
The rise of financial technology (fintech) has brought a flood of new companies operating differently from standard banks. Companies like Upgrade, Inc., and Prosper Marketplace are two of the most popular personal loan entities available through new technology. However, these lenders are subject to different laws than other financial institutions. Despite the state’s efforts to protect its citizens with interest rate caps and stringent lending laws, some entities continue to operate outside the legal boundaries, charging exorbitant and illegal interest rates to unsuspecting borrowers.
The Legal Framework
The North Carolina Commissioner of Banks (NCCOB) sets interest rate limits on unlicensed financial institutions. North Carolina law limits how much financial institutions may charge consumers. These regulations aim to prevent usury –lending money at unreasonably high interest rates. Unfortunately, unlicensed banks and some online lenders sidestep these regulations, charging predatory interest rates to increase profits.
In North Carolina, banks like Upgrade and Prosper that are not registered with the NCCOB office cannot charge interest rates exceeding 16% on personal loans. Surprisingly, there are many reports of companies like Upgrade and Prosper violating this statute on online consumer forums.
The Impact on Consumers
The consequences of illegal interest rates are dire. Borrowers may find themselves in a debt spiral, where the compounded interest makes it nearly impossible to pay off the principal balance. The financial strain, as a result, can lead to serious problems, including damaged credit scores, harassment from debt collectors, and even bankruptcy.
Taking Action
Don’t suffer in silence if you suspect you’ve been charged an illegal interest rate. Reach out to legal professionals who can guide you through fighting back and reclaiming your financial stability. A consumer protection attorney can help you understand your rights and identify where they may have been violated. Recently, Maginnis Howard filed suit against Upgrade and Prosper regarding their interest rate practices. We offer free consultations and a contingency arrangement for most consumer cases. That means you don’t pay unless we win.
Contact a Maginnis Howard attorney today through our contact page, or by calling (919) 526-0450. We serve clients across North and South Carolina from our offices in Charlotte, Raleigh, and Fayetteville.
