FTC Demands LendingClub Clearly List Fees | PYMNTS.com
LendingClub, the online lender, has agreed to pay $ 18 million to settle fees from allegedly cheated customers, the Federal Trade Commission (FTC) reported on Thursday (July 15th).
Apparently, the lender had misrepresented itself as to how it charges hidden fees.
FTC regulations prohibit LendingClub from “making false statements to loan applicants.” The company was also required to communicate “clearly and conspicuously” the total amount borrowers will get as well as the total charges, if any.
In April 2018, the FTC sued LendingClub, arguing that the company had allegedly falsely promised loan seekers that they would get a specific amount of loans with no hidden fees.
The FTC writes that the company allegedly deducted hundreds of thousands of dollars from what the press release said were “hidden upfront charges.”
Additionally, the FTC charges that LendingClub said customers could be approved for loans when they weren’t.
The FTC also added that LendingClub was taking money from customers without authorization, and an earlier ruling also found that LendingClub had told customers their loans were “open” when the funds were not. The company is also said to have withdrawn double payments from customers directly from their bank accounts and billed those who canceled automatic payments or paid off their loan. Customers were incurring overdraft fees and preventing them from making further payments.
LendingClub’s problems go back several years. PYMNTS wrote in 2018 that the company’s shares hit a new low after claims by regulators it secretly added fees and charged borrowers even after paying off their loans.
The Federal Trade Commission (FTC) said LendingClub violated federal laws protecting consumers from “deceptive and unfair” practices. Because of this, LendingClub shares fell 14% at that time.