California-based Oportun has filed the most debt collection cases in the state and sues to intimidate its mostly Latino customer base
WASHINGTON, D.C. – A new report released today by the Center for Responsible Lending (CRL) offers new evidence that Oportun, the California-based financial services provider that also operates in eight other states, regularly engages in egregious, abusive, and intimidating debt collection practices in California.
The report finds that Oportun has been a top filer of cases in California since 2018; that the company sues to intimidate its mostly Latino customer base; and that Oportun did not make meaningful changes to their debt collection model until it was the subject of public pressure -- even after the onset of the coronavirus public health and economic crisis and may continue to pursue legal cases even before the crisis is over. Read the report.
“Oportun claims to be a provider of alternatives to predatory loans, to help build credit for underserved communities, like Latino and undocumented borrowers who have limited options for mainstream financial services,” wrote authors Julia Barnard, Kiran Sidhu and Marisabel Torres in the report. “However, by subjecting customers who cannot afford to pay back their loans to abusive litigation tactics, they grossly contravene their mission and even undermine the financial stability of the impacted borrowers.
“Research shows that collectors often use the court system to involuntarily collect payments from borrowers who are otherwise unable to pay. However in recent years, Oportun—a mission-driven CDFI—became the most prolific filer of legal debt collection cases in small claims court in recent years and through the pandemic last year. Furthermore, because negative credit histories and related lawsuits are a negative factor when immigrants apply to become US permanent residents or citizens, Oportun’s tactics to pursue relatively small debts in court could have catastrophic impacts on families in the long term.
Below are details of the key findings of the report, “Suing to Intimidate: New Evidence Confirms that Oportun Abuses and Intimidates Families in Court to Collect Small-Dollar Loan Debts in California Courts”:
Oportun Has Been Top-Most Debt Collection Case Filer Since At Least 2018
CRL’s analysis of the top ten most-populous counties in California indicates that Oportun filed at least 23,500 cases in California in 2019 and has filed over 13,000 cases in 2020, for a total of at least 36,500 cases filed over two years. This finding is consistent with reporting from ProPublica and The Guardian, outlets that established that the company filed 47,000 suits across Texas over the last four years, making it the state’s most litigious personal loan company; and, that Oportun accounted for at least 15% of small claims filings in California from mid-2017 to mid-2018.
CRL’s analysis of cases filed in 2019 and 2020 in California’s most populous county, Los Angeles, confirms that Oportun is a top filer of debt collection cases:
- Of Oportun’s 213 total storefronts in the State of California, a total of 81 locations, or more than one in three (38%) storefronts, are located in Los Angeles County.
- In 2018, 2019, and 2020, Oportun filed more cases than prolific collectors such as Portfolio Recovery Associates, LLC.
- For years, Oportun has filed more cases than the creditors that file enough cases to be counted among the top ten most filing plaintiffs in cases filed from 2012-2017, including Bank of America, Capital One Bank, and Wells Fargo, and third party debt collectors such as Portfolio Recovery Associates (PRA) and Midland Funding
Oportun is Suing to Intimidate
Oportun is using the court system to intimidate borrowers, who are mostly Latino, into immediate repayment. Research indicates that even borrowers attempting to repay their debts cannot avoid being sued, that Oportun typically pursues consumers in California in the small claims venue where they are not permitted to have legal representation, and that one in three cases filed by Oportun results in a default judgment.
- Complaints filed by Oportun’s borrowers with the Consumer Financial Protection Bureau (CFPB) indicate that even borrowers attempting to repay their debts in good faith are unable to avoid being sued in court. Several people reported that they had proposed a repayment plan to Oportun, but that it had been rejected and that Oportun instead chose to pursue them in court. In one complaint filed with CFPB, a California servicemember wrote “They don’t want to support me in scheduling affordable monthly payments.”
- Oportun’s cases are almost always filed in small claims courts, where collectors can pursue a maximum amount of $2,500 in California. Such courts are not legally required to provide interpreters, nor do they permit attorney representation legal counsel according to the state’s rules. This sue-to-intimidate model is predominantly affecting the Latino community, for whom Spanish is the main spoken language for many and who may experience additional barriers in confronting an English-only legal process.
- Although many cases are resolved out of court, Oportun also racks up court wins using default judgments, a type of automatic win that occurs if the consumer never appears in court to defend themselves.
Oportun Continued to File Cases After the Onset of the Coronavirus Crisis
Oportun has filed thousands of cases throughout 2020, in the midst of the coronavirus pandemic and associated economic crisis. In Los Angeles County alone, over 8,000 cases were filed in 2020, again making Oportun the most-filing debt collector in that county for the year. Oportun filed over 3,000 cases after March 2020 and only paused all filings after the ProPublica and Guardian articles were published, indicating that the decision was more influenced by negative publicity than by a good faith attempt to ease repayment pressure during an unprecedented economic crisis that disproportionately impacted Latino families. Furthermore, as of January 20201, Oportun had not dismissed all pending cases as it promised to do.
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