Tuesday, July 25

CFPB Orders LendUp to Pay $3.63 Million for Failing to Deliver Promised Benefits

The job of the most honest seller is to sell you, not to give you reasons to buy from a competitor. That over-riding reality drives the free-enterprise system, and places a responsibility on you.

FoolProof's Hall of Shame is here to remind you why a healthy dose of skepticism should rule your decisions before dealing with anyone who wants to touch your money or your general welfare.

September 27, 2016

Loans

Online Lender Did Not Help Consumers Build Credit or Access Cheaper Loans, As It Claimed

Source: www.consumerfinance.gov

Today the Consumer Financial Protection Bureau (CFPB) took action against online lender Flurish, Inc., doing business as LendUp, for failing to deliver the promised benefits of its products. The CFPB found that the company did not give consumers the opportunity to build credit and provide access to cheaper loans, as it claimed to consumers it would. The Bureau has ordered the company to provide more than 50,000 consumers with approximately $1.83 million in refunds. The company will also pay a civil penalty of $1.8 million.

The CFPB found that the company:

  • Misled consumers about graduating to lower-priced loans
  • Hid the true cost of credit
  • Reversed pricing without consumer knowledge
  • Understated the annual percentage rate
  • Failed to report credit information

LendUp is required to:

  • Provide approximately $1.83 million in redress to victims
  • End deceptive loan practices
  • End unlawful advertisements:
  • Ensure accuracy of pricing
  • Pay a $1.8 million civil penalty