Ameriquest to Refund $325 Million

Ameriquest � the US�s largest lender to borrower with less than perfect credit � will have to refund almost $325 million in damages to borrowers from Missouri and Kansas. The attorney generals for 49 states brought charges against the company for predatory lending.

Perhaps this is the second largest consumer protection settlement in history. Ameriquest Co. was accused of deceptive practices, including failure to disclose prepayment penalties, misrepresentation of prices and causing inflated appraisals between 1999 and 2005. The investigators found that in order to be competitive, the company used unscrupulous tactics.

Borrowers in Missouri will split about $3.2 million between 10,000 people. Kansas borrowers, more than 4250 of them, will share $1.5 million. The remainder of the $325 million settlement will be handed out to consumers across the nation, with averages of $600-$1000 for each borrower. The company denied any wrongdoing, blaming employee negligence for the fraud.

The payout could take months, and will include mailed notices informing customers of their refund. If the borrower accepts the refund, they give up their right to independently sue Ameriquest. Private lawyers say that 12 class-action suites are pending against the company at this time. The notice will include notice that the borrower can independently sue as opposed to accepting the payout. Ameriquest has had problems in the past; in 2005 the FBI investigated three branches for appraisal fraud. Ameriquest says that their company is not to blame, but rather that the few bad apples that they employed have caused all these problems.