Household/Beneficial settlement payments coming in December

The Missouri Department of Economic Development announced that consumers in the state who were affected by the abusive practices of Household/Beneficial Finance will receive settlement payments later this year.

Household, one of the largest consumer credit lenders in the world, has been in dispute with several states over alleged abusive lending practices.

More than 16,000 Missourians will be eligible to receive payments that will range from $50 to several hundred dollars. All consumers who entered into real-estate secured loans with Household/Beneficial between Jan. 1, 1999, and Sept. 30, 2002, may share in the settlement fund. Loans in the state totaled 24,654.

The state of Missouri will notify individuals by mail and inform them of the steps necessary to participate in the settlement.

What prompted action

The payments to Missouri consumers are the result of a consent judgment filed in December in Cole County Circuit Court between Household and the state.

The attorney general and finance regulators of each state and the District of Columbia negotiated the settlement, and the total payout exceeds $484 million nationwide. It is the largest single consumer settlement in the history of the United States. The settlement addresses claims of abusive and unfair lending practices such as excessive points, misleading disclosures and prepayment penalties. The states had alleged that Household violated state laws by misrepresenting loan terms and failing to disclose material information to borrowers.

The investigation

The investigation focused on real-estate secured loans. Consumers complained that Household charged far higher interest rates than promised, charged costly prepayment penalties and deceived consumers about insurance policies. Some consumers were trapped in costly loans by some of the practices, the states alleged.

"We are gratified that this process is moving forward and that Missouri consumers who were affected will soon receive settlement payments," said Joseph L. Driskill, director of the Missouri DED. Payments will be mailed in mid-December to consumers who take the appropriate steps to participate in the settlement.

Missouri's cut

"Missouri's proportionate share of the settlement totals more than $13 million for Household's alleged abusive lending practices in the market. We have established a plan to distribute the settlement fund to consumers and now we're ready to put the plan into motion," Driskill said.

Additional information about the settlement is available online at www.house hold-beneficialsettlement.com.