Minnesota Attorney General Lori Swanson announced Wednesday that she's suing an Edina-based debt collector for charging illegally high interest rates on bank fees from Wells Fargo and U.S. Bankcorp.
The Associated Press reports Bradstreet and Associates allegedly broke state law by charging nearly 22 percent in interest on bank debt. The Star Tribune points out that's well above the state's interest rate cap of 6 percent. Plus, contracts the consumers had with the two banks didn't allow interest to be charged on overdrawn funds or fees, the newspaper says.
"Companies have the right to collect legitimate debt, but they shouldn’t charge people for interest that isn’t owed," Swanson said in a statement.
The lawsuit alleges Bradstreet and Associates bought at least $18 million in bank debt since 2009 and routinely took consumers to court in order to collect, according to the AG's office.
Swanson is seeking restitution and wants the company to stop its illegal practices that affect thousands of Minnesotans, the Star Tribune reports.
Swanson has been cracking down on illegal debt collection practices in Minnesota in the last year. In October, she filed suit against Florida-based United Credit Recovery, LLC, who also acquired debt from Wells Fargo, U.S. Bancorp and many others.
Swanson also championed legislation that tightens regulations for companies that purchase debt and protects consumers from abuse. The new law passed last year.