SACRAMENTO, Calif. (AP) -- A community group and two alleged victims of predatory lending filed a lawsuit Wednesday accusing one of the nation's largest lenders of defrauding borrowers.
The suit covers what the plaintiffs estimate is $2 billion in secured loans to tens of thousands of borrowers over the last four years by Prospect Heights, Ill.-based Household International and its subsidiaries, Household Finance Corporation of California and Beneficial California Inc.
A similar lawsuit by California state regulators led to a $12 million settlement with the firms last month. Similar allegations prompted a new state law that took effect this year.
Wednesday's lawsuit asks that the borrowers get their interest and fees back, along with any profits Household obtained by unfair or deceptive advertising.
The advertising allegedly included "telling people they will be saving money when in fact it's going to cost them more," said Lisa Donner, director of the Financial Justice Center for the Association of Community Organizations for Reform Now, which filed the suit.
Household International spokeswoman Megan Hayden said she couldn't comment on the suit because she hadn't seen it. She said Household has been trying to talk with community groups such as ACORN for a year.
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