Colorado Sues EarnIn, Calls Wage Access Product Illegal High-Cost Loan
Colorado AG sues EarnIn for illegal high-cost lending via its earned wage access app.
Why it matters: This lawsuit challenges how earned wage access products are regulated, potentially reshaping rules for fintech firms, employers, and consumer protections nationwide.
- Colorado AG Phil Weiser sued Activehours Inc. (EarnIn) on Aug. 27, 2026, alleging illegal payday lending.
- EarnIn made over 3.1 million loans totaling $300 million to nearly 57,000 Colorado users from 2023 to 2025.
- The suit claims effective APRs averaged 388%, with some exceeding 1,000%, violating Colorado's 36% cap.
- EarnIn’s app allegedly pressured users to tip through hidden options and multiple taps.
- AG seeks restitution, civil penalties, disgorgement, and injunctions to stop these practices.
On August 27, 2026, Colorado Attorney General Phil Weiser filed a lawsuit against Activehours, Inc., operating as EarnIn, accusing its 'Cash Out' earned wage access (EWA) product of operating as an illegal, high-cost payday lender in violation of state laws. The complaint asserts that despite presenting itself as a pay advance, the product functions like a consumer loan with excessive interest rates.
Between January 2023 and July 2025, EarnIn made over 3.1 million loans to 56,778 Colorado consumers, amounting to approximately $300 million in total loan volume. During this period, the company collected more than $16 million in tips and 'Lightning Speed' fees, which the complaint alleges drive effective annual percentage rates (APRs) to nearly 388% on average, with some instances exceeding 1,000% — far above Colorado's 36% legal cap on payday loans.
The lawsuit further highlights deceptive app design tactics that allegedly nudged consumers toward tipping. For example, the app reportedly required multiple taps to select 'no tip,' buried the 'no tip' option, and displayed messages like 'pay it forward' to encourage voluntary fees. According to Attorney General Weiser, these design choices mislead users into paying high fees disguised as tips.
"Colorado voters acted decisively in 2018 to rein in predatory payday lending. EarnIn's product, however, provides consumer loans at high interest rates that are styled as accessing their pay," said Weiser. The Attorney General is seeking restitution for affected consumers, civil penalties, disgorgement of illegally obtained funds, and injunctive relief to halt EarnIn's alleged unlawful practices.
This case underscores the ongoing regulatory scrutiny of earned wage access products, which have gained popularity as alternatives to traditional payday loans but raise questions about consumer cost and protection. A ruling against EarnIn could set a precedent impacting fintech companies, employers offering such advances, and state-level lending regulations nationwide.
For further reading, see the Colorado Attorney General’s press release and industry coverage at Consumer Finance Monitor.
By the numbers:
- 3.1 million loans — issued by EarnIn in Colorado from 2023-2025
- $300 million — total loan volume to Colorado consumers
- Nearly 388% APR average — alleged effective interest rate violating state law