The New York State Attorney General’s Office has filed lawsuits against two leading earned wage access (EWA) companies, DailyPay and MoneyLion, accusing them of engaging in illegal, deceptive, and abusive lending practices that allegedly exploit low-income workers.
Attorney General Letitia James announced the legal action on Monday, April 14, alleging that both companies are effectively operating payday loan schemes under the guise of wage access services. The lawsuits claim that the fees associated with their services can amount to annual interest rates as high as 750%, far exceeding legal limits.
“While many New Yorkers are worried about making ends meet, DailyPay and MoneyLion are making tremendous profits by extracting workers’ hard-earned wages,” James said in a press release. “I’m suing DailyPay and MoneyLion because New Yorkers deserve to keep the money they earn, not have it taken by predatory lenders.”
Allegations of Misleading Practices
According to the Attorney General’s Office, the companies allegedly pressured users into taking repeated advances to cover shortfalls created by earlier ones—a practice that mirrors traditional payday loan cycles known to trap borrowers in high-cost debt…