The Spotloan class action lawsuit ended in a 2020 settlement worth $18.5 million in cash plus the cancellation of roughly $170 million in outstanding consumer debt. The case, filed in federal court in Virginia, accused Spotloan’s operator of using an affiliation with a Native American tribe to charge interest rates as high as 490% while skirting state licensing and rate-cap laws. About 366,000 borrowers who took a Spotloan loan between January 1, 2012 and October 31, 2018 were covered.
The Case Behind the Settlement
The consolidated action was Turner, et al. v. ZestFinance, Inc., et al., Case No. 3:19-cv-00293, filed on April 17, 2019 in the U.S. District Court for the Eastern District of Virginia before Judge David J. Novak. It pulled together earlier suits filed in federal courts in Washington, Connecticut, and Virginia, along with a California state court proceeding.
Three defendants were named: BlueChip Financial, doing business as Spotloan and owned by the Turtle Mountain Band of Chippewa Indians of North Dakota; ZestFinance Inc., the technology firm whose machine-learning software underwrote the loans; and Douglas Merrill, ZestFinance’s founder and a former chief information officer at Google.
Plaintiffs sued under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), alleging the defendants ran an illegal lending enterprise that used the tribal affiliation to charge borrowers rates far above state interest caps. BlueChip initially tried to force the dispute into arbitration and invoked tribal authority, submitting tribal court decisions and the Turtle Mountain Tribal Code. That approach did not work, and the parties settled. All defendants denied wrongdoing.
ZestFinance paid $18 million of the $18.5 million settlement. BlueChip paid the remaining $500,000.
Who Was Eligible
The class included every consumer in the United States who took out a loan from BlueChip Financial between January 1, 2012 and October 31, 2018. That worked out to roughly 366,000 people. No claim form was required. BlueChip identified eligible borrowers directly from its own business records.
What Borrowers Received
The settlement, filed on February 10, 2020 and granted final approval on July 9, 2020, delivered relief in two forms.
Debt cancellation. For loans originated during the class period that BlueChip still owned as of December 31, 2019, the balance was reduced to zero. BlueChip had to stop all collection activity on those loans and ask the credit reporting agencies to permanently delete negative tradeline information, including late payments. The company also agreed not to sell or transfer remaining unpaid accounts to third-party debt buyers. This piece of the deal accounted for roughly $170 million in wiped-out balances.
Cash payments. The $18.5 million fund was distributed pro rata to eligible class members, with payment amounts turning on which state a borrower lived in when they took the loan.
Borrowers in about two dozen states, including Arizona, Colorado, Connecticut, Illinois, Indiana, Massachusetts, New Jersey, New York, North Carolina, Ohio, Pennsylvania, and Virginia, could claim the full amount they had paid, provided they had repaid at least the original principal. A second group, including California, Florida, Texas, and Washington, was entitled to the interest paid above the state’s legal limit. Borrowers who lived in Utah or Nevada at the time of their loan received nothing, because those states’ laws did not provide the same basis for recovery.
After administrative costs, attorney fees capped at just over $6.1 million, and $5,000 service awards for each of the 25 named plaintiffs, the balance was split among eligible class members. When payments began going out in September 2020, some borrowers reported receiving checks of around $168.
The Separate Connecticut Action
Connecticut borrowers had a second, distinct source of relief. The Connecticut Department of Banking brought its own enforcement action against BlueChip Financial, and on June 22, 2018 the state Banking Commissioner issued a temporary order to cease and desist, an order to make restitution, and a notice of intent to impose civil penalties of up to $100,000 per violation.
The state alleged BlueChip had been lending to Connecticut residents at rates between 390% and 490% without the small loan license Connecticut requires for loans of $15,000 or less at more than 12% annual interest. The Commissioner also alleged that BlueChip had written to the Department in February 2014 saying it had stopped lending in Connecticut and then continued anyway.
A settlement agreement finalized on July 23, 2019 permanently barred BlueChip from making, advertising, or collecting on loans to Connecticut borrowers. The company had to write off every outstanding balance owed by a Connecticut resident, including accrued interest and late fees, and request deletion of any negative credit reporting tied to those loans. No civil penalties were imposed and BlueChip did not admit liability. Both BlueChip and the Turtle Mountain Band agreed not to assert sovereign immunity in any action to enforce the settlement, and the tribe provided a limited waiver of immunity to block the creation of new entities that might sidestep the agreement.
Is Spotloan Still Operating
Yes. The settlement resolved past claims; it did not shut Spotloan down. As of 2025, Spotloan continues to make loans in roughly 40 states at rates up to 490% APR under lending licenses issued by the tribe’s own Lending Commission rather than by any state regulator. Effective December 2025, a tribal limited liability company called Ningo Lending LLC assumed the Spotloan brand and took over originating and servicing the loans previously handled by BlueChip Financial. Like BlueChip, Ningo Lending is owned by the Turtle Mountain Band. Spotloan does not lend in Arkansas, Connecticut, the District of Columbia, Illinois, Maryland, Minnesota, New York, North Dakota, Pennsylvania, Vermont, Virginia, or West Virginia.