American First Finance Terms of Loan Not Disclosed California Class Action

American First Finance, Inc. (AFF) has agreements with retail stores that allow it to provide financing for retail purchases. But the complaint for this class action allege that the company is not licensed to provide financing in California and that it makes financing Security Agreements with consumers that do not properly disclose the terms or even name AFF as a party.

The class for this action is all California residents who bought consumer goods or services from AFF-affiliated retail businesses and whom AFF claims are or were bound to the terms of its Security Agreements, between November 11, 2014 and the date of class certification in this case.

Originally, AFF was not licensed to do any business in California. In February 2018, it registered with the Secretary of State to do business in California, but it did not obtain a license to provide loans in California.

Instead, AFF made agreements with retail stores to offer financing for customer purchases. According to the complaint, consumers believe they are entering into an agreement to make installment payments to the retail stores.

In fact, the complaint alleges, customers do not know they’re entering into an agreement with third party AFF. Without the knowledge of the consumers, the complaint alleges, “at the time of sale, those businesses submitted the [consumers] personal information to AFF which then generated a financing agreement purporting to be between the merchants and the [consumers] without proper disclosure of the financing terms and purporting to obligate consumers to make payments to AFF, which is not even a named party to the agreements.”

And that’s not all: The complaint claims that the consumers are not told of the terms of the loan, which may include “interest rates often exceeding 120%.”

The complaint provides the example of its plaintiff, Larry Facio, who made a purchase at Roseville Wheels & Tires (also known as California Wheels and Tires) in Roseville for $2,292. The complaint alleges that Facio was required to sign the electronic pad but was not told of the terms of the loan, which included an interest rate of 144.59%.

When Facio went to his bank account to set up electronic payments to Roseville for the financing, the complaint claims, he was startled to find that AFF, a company he had not heard of, had already reached into the account to set up electronic payments to itself. Facio tried to get AFF to withdraw enough then to avoid financing charges, but the complaint alleges he had difficulty concluding business with the company.

Because AFF does not have the proper license to offer and make loans to consumers in California, the complaint says it asks the court to declare that “AFF’s Security Agreements are void and that AFF had no right to collect or receive any principal, charges, or recompense in connection with the transactions; and[] that all payments received to date are to be refunded.”

Article Type: Lawsuit
Topic: Loans
Tags: Excessive Interest Rate, Loan-Related Unfair Practices, Not Licensed to Make Loans