American First Finance, Unlicensed in California, Charges Illegally High Interest, Says Class Action

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American First Finance Loans Class Action Lawsuit Overview: 

• Who: A consumer lodged a class action lawsuit against lender American First Finance, Inc. 
• Why: The plaintiff claims American First Finance is not licensed to provide loans in California and charges interest rates that exceed maximum legal limits.
• Where: The class action lawsuit is pending in California federal court.

American First Finance is an unlicensed lender that deceives consumers into receiving loans with interest rates that exceed the maximum legal limit, a new class action lawsuit alleges. 

Plaintiff Larry Facio claims American First Finance is not licensed to provide loans in California and fails to disclose the essential terms of the loans they unlawfully offer. 

Facio wants to represent a California Class of consumers who purchased goods or services from retail businesses affiliated with the lender who are, or who the company claims to be bound to its security agreement. 

American First Finance Hid Terms, Charged ‘Exorbitant’ Interest, Claims Class Action

The plaintiff says he was never informed his purchase was being financed by American First Finance or what the financing terms would be when he bought tires for his car at Roseville Wheels & Tires in 2017.

Facio claims he was told he would not have to pay any interest on the tires if he paid in full within 100 days, however, he ended up being charged an “exorbitant” interest rate for his purchase and was only informed his loan had been assigned to American First Finance after he contacted the retailer. 

“Had he known of the interest rates and other terms of the financing, Mr. Facio would have refused to complete the transaction,” states the class action lawsuit. 

The plaintiff says he was made to sign a security agreement at the time of his purchase, but that he was never shown the financing terms. 

“Mr. Facio was not informed about AFF and believed that his payments would be made to Roseville Wheels & Tires,” states the class action lawsuit. “He was not shown the face of the computer to know what he was authorizing by e-signing on the small electronic pad.” 

American First Finance later provided documents to Facio which showed the purchase contract was not manually assigned, but instead was computer generated, according to the class action lawsuit. 

The documents also stipulated that he could only contact the lender to discuss the terms of his loan, the class action lawsuit alleges.

Facio claims retailers go along with the “fraudulent and illegal” scheme because it helps them sell their products or services to customers who want to use a payment plan the company wouldn’t otherwise be able to offer. 

“AFF recruits new merchants with the claim that merchants who offer AFF loans can ‘supercharge sales’ and AFF decisions to finance loans will be ‘super fast!’,” states the class action lawsuit. 

Facio claims AFF is in violation of California’s Consumers Legal Remedies Act, Unfair Competition Law, and the Unruh Act, Civil Code § 1801. 

Facio is demanding a jury trial and is requesting monetary damages, statutory or punitive damages, and restitution for himself and all Class Members. 

A separate class action lawsuit revolving around allegedly unsavory loans was filed in California this month by consumers who argue that Wells Fargo and other lenders offer loans to first time home buyers that are designed to fail. 

American First Finance competitor Affirm Holdings was accused of tricking consumers into purchasing more, and paying high fees later, with “buy now, pay later” payment plans, in a class action lawsuit filed earlier this year. 

Have you been charged a high interest rate after being unknowingly financed by American First Finance? Let us know in the comments! 

The plaintiff is represented by Robert S. Green, James Robert Noblin, and Emrah M. Sumer of Green & Noblin, P.C., Alicia L. Hinton of the Law Office of A.L. Hinton, and James C. Sturdevant of The Sturdevant Law Firm, APC. 

The American First Finance Loans Class Action Lawsuit is Facio v. American First Finance, Inc., Case No. 3:21-cv-08184, in the U.S. District Court for the Northern District of California.

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