MoneyLion (ML) and DailyPay have been sued by New York Attorney General Letitia James for allegedly taking advantage of workers with "illegal high-interest loans," James' office said in a statement Monday.
James alleges that both companies employ deceptive advertising to entice workers to take out their "exploitative loans." She claimed that over half of all MoneyLion loans have annual interest rates above 500%.
The lawsuits allege that the practices of the two companies "constitute illegal and deceptive conduct and abusive lending practices that violate New York's longstanding usury prohibitions."
DailyPay called the move "disappointing" in a statement sent to MT Newswires. "The actions taken by the Attorney General's office suggest that it prefers consumers to rely on loan sharks or pay higher overdraft and late fees over on-demand pay, a proven safer and cheaper financial alternative," DailyPay Chief Legal and Strategy Officer Jared DeMatteis said.
MoneyLion did not immediately reply to a request for comment from MT Newswires.
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