Earnin Flouts Lending Laws With 'Linguistic Trick,' Suit Says

Law360 (November 18, 2019, 9:29 PM EST) -- Earnin, the app service that lets users get advances on wages they've earned, has been hit with a proposed class action in California federal court alleging that its tip-based business model is really just a form of illegal payday lending.

In a complaint filed Friday by a Kansas user of the service, the Silicon Valley-based Activehours Inc., the company behind Earnin, was accused of attempting to evade state and federal lending laws "through a linguistic trick" — namely, framing the cost of its advances not as fees or interest but as "tips."

"Semantics aside, Earnin is in the business of loaning...

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