BROOKLYN (CN) - A Long Island resident filed a class action against J.G. Wentworth, 321 Henderson Receivables and affiliates, claiming the companies tried to shirk federal regulations requiring them to disclose credit terms by describing their loans as "sales."
According to the complaint filed in Federal Court, J.G. Wentworth and 321 Henderson Receivables use the misleading "sales" label to avoid disclosing crucial information about their loans. For example, the complaint says the companies only disclose the "interest rate" instead of a standardized annual percentage rate (APR), which is the industry standard.
Lead plaintiff Christopher Capela says the interest rate "excludes charges that state law does not consider interest" and "can be calculated many ways."
He adds that the companies make false promises about their "structured settlement" service, which lets people collect money from a lawsuit in one lump sum in return for a percent of the settlement.
The companies allegedly tell customers to expect the money in "six to eight weeks," but Capela says his loan disbursements "took several months."
He is represented by Francis Bigelow of Sadis & Goldberg.
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