On July 14, 2021, the Federal Trade Commission (FTC) entered into a settlement agreement with a national peer-to-peer personal loan lender to resolve allegations stemming form 2018 lawsuit that the FTC had filed in the U.S. District Court for the Northern District of California. Pursuant to the settlement, the lender agreed to pay $18 million to resolve allegations that the lender deceived consumers when it falsely promised that consumers would receive a specific loan amount with “no hidden fees.” In reality, however, the lender actually charged hundreds or thousands of dollars in hidden fees in connection with each loan. The FTC also alleged that the lender falsely informed consumers they were approved for loans, when the consumers, in fact, were not, and took money from consumers’ bank accounts without proper authorization.
The settlement agreement bars the lender from making future misrepresentations to loan applicants and requires the lender to clearly and accurately disclose the amount of any prepaid or upfront fees along with the total amount of funds the borrower will receive.
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