Los Angeles – State prosecutors on Monday hailed a $325 million settlement with lending giant Ameriquest, saying the deal will give some 725,000 borrowers in 49 states a chance at recovering some money lost because of what they described as deceptive lending practices.
“We found that Ameriquest’s lending practices too often violated principles of fairness,” said California Attorney General Bill Lockyer. “This settlement provides a good measure of justice by compensating victims for previous practices and to see there aren’t problems in the future.”
Colorado will receive between $8 million and $10 million to settle claims with more than 12,500 consumers, Attorney General John Suthers said.
The states began investigating the Orange, Calif.-based company, which lends to people with poor credit, more than two years ago after receiving complaints from tens of thousands of consumers who claimed they were paying more for their loans than they bargained for.
The states have alleged that the company’s business practices were deceptive, leaving some borrowers saddled with extra fees or higher mortgage rates.
The agreement is the second- largest consumer-protection settlement reached by a state or the federal government, officials said. The largest was for $484 million, obtained by some states in 2002 from Household Finance Corp.
