The Attorney General for the District of Columbia has filed suit against ActiveHours Inc., doing business as EarnIn, alleging that the app-based lender deceptively marketed and provided illegal high-interest loans to more than 20,000 consumers in DC.

In the suit, filed in D.C. Superior Court, Attorney General Brian L. Schwalb alleged that the company falsely claimed that its earned wage advance product is not a loan, and that it can be accessed instantly with no mandatory fees and no interest. In reality, consumers must pay a “Lightning Speed” fee to obtain their funds, according to Schwalb. The suit also alleges that EarnIn does not inform users about the amount of the fees until after they sign up, provide a substantial amount of personal and financial information, and attempt to get the promised instant cash.

EarnIn advances the loan and then secures repayment from borrowers’ next paycheck. Schwalb alleged that as a “result of the ‘Lightning Speed’ fee alone, the average interest rate on an EarnIn instant “cash out” is over 300%—more than 12 times the District’s 24% interest rate cap,” according to Schwalb. “Moreover, although it acts as a lender, EarnIn has been operating in the District without the required lending license.”

The suit alleged that while EarnIn markets itself as an alternative to payday loans, the company employs a similar model—”providing short-term loans at high interest rates and requiring repayment on a borrower’s next payday.”