CFPB signs agreement with Fintech company to provide loans to consumers without their permission | Goodwin


July 12, 2021 Consumer Financial Protection Bureau (CFPB) announced this is consent order was reached with an Atlanta-based non-bank lending company that would require the company to cancel up to $ 9 million in consumer loans, resolving charges that a fintech company violated the Consumer Financial Protection Act (CFPA) by issuing and servicing unauthorized loans … …

The CFPB claims the company used unfair practices in violation of the CFPA, using sellers, usually home renovators, to promote financing options to consumers and make local lending decisions. The company’s sellers can sign consumers up for loans through the company’s website or app. The CFPB argues that sloppy business practices and a lack of oversight by the lending company have allowed sellers to use consumer services by signing loans with thousands of consumers that they did not authorize or solicit. Between 2014 and 2019, the company received about 6,000 complaints from consumers who did not approve loan applications. In addition, some consumers complained that they did not know the loan was in their name, or even heard of the company before consumers began receiving payrolls and debt collection letters.

The consent order also requires the lending company to pay a $ 2.5 million civil penalty and implement new procedures to prevent future fraudulent loans.

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