LendingClub To Pay $18 Million To End Allegations That They Mislead Their Customers, Took On Malevolent Business Practices
Fintech company LendingClub is set to pay $18 million as a settlement after it has agreed to the terms of the Federal Trade Commission that took the company to court for allegedly making statements regarding their approval process and loan fees that may potentially mislead customers.
Consumers Score A Win Thanks To The Federal Trade Commission
The LendingClub FTC Class Action Lawsuit was filed by the Federal Trade Commission (FTC) officials accusing online lending company LendingClub of engaging in unfair and deceptive business practices.
The FTC contended in their case that the LendingClub has made malicious and deceptive statements regarding their loans having no hidden fees at all, etc. It is said that LendingClub borrowers were not properly informed of the origination fees that would be deducted from their final approved loan amount when transacting with the company.
In addition, LendingClub also purportedly tricked customers into thinking that their loans will get approved even though their applications are still being processed and reviewed before approval. Some applications get the green light, while others end up with an unfortunate fate.
Not only that, but the FTC also claimed that the LendingClub has made illegal withdrawals from their borrowers’ and customers’ bank accounts along with not properly following the rules covering proper client privacy notice disclosure.
LendingClub Promises To Make Changes, Maintains Its Innocence
Besides paying the regulatory body $18 million as settlement, LendingClub has promised to change its marketing strategy and to message to fully inform their clients about details surrounding their loan packages and other financial products and services moving forward.
LendingClub legal team also acknowledged the role of the FTC and other related government regulatory bodies’ to uphold and protect Americans’ financial rights. However, the company has remained with its stance that it did not commit any wrongdoing.
This is a settlement update, and the case proceedings are still ongoing.
About The Company
Online lender and fintech company LendingClub was founded in 2006. The company is known to be the first in the industry to offer peer-to-peer lending services that have gained the approval of the Securities and Exchange Commission (SEC). Headquartered in San Francisco, California, LendingClub is headed by the company CEO Scott Sanborn.
Editor’s Note on LendingClub Settlement 2021:
This feature discusses the latest news about the settlement agreement between the FTC and LendingClub to end the legal charges lodged against the latter.
Case Name(s) & No.(s): Federal Trade Commission v. LendingClub Corp.; Case No.: 3:18-cv-02454
Jurisdiction: United States District Court for the Northern District of California
Products/Services Involved: LendingClub financial services
Allegation(s): LendingClub has made numerous misleading marketing statements on their products and services that end up leaving their customers in the dark from the whole truth.
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