HARRISBURG, Pa. — Over 1,300 Pennsylvania consumers who borrowed money through SoLo Funds, Inc., an online peer-to-peer lending platform, have received restitution payments following a settlement with the state, Attorney General Michelle Henry announced on Monday.
The settlement, reached on July 1, alleged that California-based SoLo Funds violated Pennsylvania’s usury and consumer protection laws by using a “tip and donation” model that effectively charged excessive interest rates on small-dollar loans. In total, $158,924 in restitution funds has been distributed to 1,309 Pennsylvania borrowers.
SoLo Funds allows users to borrow small amounts of money, typically repayable within 35 days, while agreeing to optional tips for lenders and donations to the platform. The Pennsylvania Office of Attorney General alleged that these practices circumvented state loan interest caps, violating the Loan Interest Protection Law and Consumer Discount Company Act. The office also accused SoLo of deceptive practices, including falsely advertising loans as “0% APR” with “no finance charge.”
Under the terms of the settlement, filed in the Philadelphia Court of Common Pleas, SoLo agreed to reform its business practices to comply with Pennsylvania law. The company paid $25,000 in civil penalties and over $25,000 in investigative costs, and it ceased collection efforts on more than $530,000 in outstanding loans, tips, donations, and fees involving Pennsylvania borrowers and lenders.
“This settlement ensures Pennsylvania borrowers are protected from deceptive and predatory practices in online lending,” Attorney General Henry stated, adding that her office will continue monitoring compliance with state lending laws.