The Zocaloans lawsuit is a legal challenge brought against lenders of payday loans in the state of Minnesota. Back in June of 2021, the Minnesota State Supreme Court heard oral arguments in a case that involved Zocaloans and their founder, Jose B. Solis. At issue was whether a previously non-regulated lender could continue to charge interest rates higher than were allowed by the state when it comes to payday loans. The Court found that the lender was indeed within its rights to do so, but found the harm done was not intentional. In a 4-3 decision the court ruled in favor of the plaintiff, who is represented by attorney Steve Scheen.
According to the legal battle that has been fought between Zocaloans and Jose B. Solis of Excelsior, the lending company was simply following the rules in terms of what is allowed by law when it comes to payday loans. According to the lawsuit, Solis and his company mismanaged their business, which led them to borrow money they didn’t have in order to expand and grow. Because of this, they were no longer able to offer good loans to consumers, but rather had to resort to taking out loans from various other sources in order to cover their losses. And that’s where the lawsuit came into play: a complaint that loan repayments were being made to Zocaloans, when they weren’t paying off enough of the loan.
So how did Zocaloans do on its end? There isn’t much to find in the lawsuit, other than it being a bad credit loans lawsuit. The court did find that the lender failed to provide adequate personal service when it came to borrowers, and did not offer reasonable reminders that payments are due. While this may not seem like a huge deal on the surface, customer service is important to customers, who want to know that their lender will actually take care of them and get them the loan when they need it. When a lender does not follow up with customers in a timely fashion, this can lead to a negative impact on a customer’s credit score.
A big part of the complaint revolves around the interest rates that Zocaloans charged for its payday loans. At around seven percent, interest rates are considered to be high for many lenders. However, in addition to the interest rates, the lawsuit says that the lender repeatedly changed the terms of the loan in order to raise its fees. For instance, instead of offering customers six-month repayment terms, it was offered at ten-month terms. This is an illegal practice, according to the lawsuit.
And finally, when a customer applies online for Zocaloans payday loans, the company allegedly didn’t make it easy for them to apply for those loans. Instead of making the process easy for them, they allegedly submitted applications to brokers. Brokers, who had ties to the lender, would then add more fees onto the original loan. Finally, when a customer requested additional information about their loan, the company did not provide that information, according to the lawsuit. This meant that those who wanted cash advance loans couldn’t apply online.
Those who are interested in applying for payday loans through Zocaloans must fill out a short online form. After doing so, the applicant must submit proof of employment. Next, the applicant must provide their bank account information, social security number, and birth date. Once all of that is done, the application should be approved, and a check should be mailed to the applicant’s bank account in as little as two weeks.
