An August 2nd investigative story by Raheem Hosseini in The Guardian puts a spotlight on the scale and depth of debt burden facing low-income primarily Latinx consumers in California through the practices of a single company. Oportun Inc emerges in the investigation as “one of the most litigious debt collectors in California,” with its high-interest unsecured loans marketed aggressively in low-income Latinx communities accounting for more than 30,000 collections lawsuits in 2019, and at least 14,000 through the first half of 2020 as the COVID-19 pandemic intensified.
The great majority of Oportun’s customers fall behind on payments for high-interest loans which are then assessed late fees and other penalties, and which ultimately end up in California’s civil courts. From 2017 through 2018, the company’s collections suits accounted for more than 15% of all small claims filings in the state. For low-income consumers, judgments in such cases can leave them facing wage garnishments and other aggressive collections for 10 years or more. And for the Latinx communities targeted by the company’s practices, fears connected to immigration status and barriers to legal counsel and representation lead to high rate of default judgments.
Informed by the knowledge and advocacy of BayLegal Regional Managing Attorney for Consumer Law Noah Zinner, and Alysson Snow of the Legal Aid Society of San Diego, Hosseini’s investigation produced quick and dramatic results. Within four days of contacting Oportun about the story, The Guardian received word that the company was dismissing thousands of collections lawsuits, and promised to revise its business practices to reduce its top rate of annualized interest and cut its number of future collections suits by 60%.