South Dakota Consumers Will Receive $800,000
(Pierre) – Over 500 South Dakota consumers will receive restitution from a mortgage lending company, thanks to an investigation by the South Dakota Attorney General’s Office and a multi-state task force of other Attorneys General and bank regulators.
As part of this landmark settlement with mortgage lender Household International, Inc., Household has agreed to pay South Dakota consumers at least $800,000 and pay up to $484 million to consumers nationally. Additionally, the South Dakota Attorney General’s Office will receive $100,000 for investigative costs. Household has also agreed to improve its lending practices.
The multi-state investigation alleged that Household violated state laws by misrepresenting loan terms and failing to disclose material information to borrowers. Consumers complained that Household charged far higher interest rates than promised, charged costly prepayment penalties, or deceived them about insurance policies. The states also allege that some consumers were trapped in costly loans.
“Over 500 South Dakotans are going to receive a chunk of the $800,000. These were people that, within the last three years, had taken out loans with Household,” said Chief Deputy Attorney General Larry Long. “The beautiful thing about this settlement is that the restitution money will not go into a state general fund, but rather directly to the consumers.”
The details of the process by which consumers will receive their restitution are being finalized and will be announced at a later date. South Dakota will design its own restitution plan since lending practices by Household varied significantly from state to state. South Dakotans victimized by Household are currently being identified and will be contacted about the settlement.
“This is a big shot in the arm for South Dakotans. We thought the Bridgestone/ Firestone settlement was monumental. It’s dwarfed by the agreement with Household. South Dakota will be seeing nearly twice as much in restitution. The direct restitution amount is believed to be the largest ever in a state or federal consumer case,” said Long.
State Attorney General Offices and banking and financial regulators from across the nation began coordinating their efforts last spring after identifying a pattern of complaints from borrowers. As of today, 44 states and the District of Columbia are supporting the Agreement of Principle with Household.