ATLANTA – An Atlanta-based fintech company has been fined $ 2.5 million after a federal investigation into unauthorized loan complaints.
GreenSky Inc. announced on Tuesday that it has entered into an agreement with the US Consumer Financial Protection Bureau (CFPB) to pay a fine and settle consumer loans in the absence of sufficient proof of customer authorization. The company has not admitted any liability or wrongdoing.
GreenSky offers technology vendors that they can use to offer consumers installment loans at points of sale, which are mostly funded by partner banks. The company originally provided home improvement loans through retailers such as Home Depot, but has since expanded into other areas, including elective surgery.
Between 2014 and 2019, GreenSky received at least 6,000 complaints from consumers who said they had not approved the loan application. An investigation into the company’s complaints revealed that its sellers were at fault in at least 1,600 cases.
“GreenSky’s sloppy business and customer service practices allowed its sellers to take advantage of vulnerable customers who needed financial assistance to renovate their homes and pay for other important retail services by providing loans without consumer consent,” said CFPB Acting Director Dave Weggio.
“For consumers to be in debt to GreenSky on loans they never knew about is simply wrong. The CFPB will not adhere to practices that allow this behavior in the market. ”
In addition to the penalty, the client reimbursement specified in the agreement is capped at $ 9 million, including $ 3 million in cash and $ 6 million in cancellation.
GreenSky President Tim Caliban said the company has already implemented many of the protocols and business practices outlined in the agreement.
“We are extremely proud of our expertise in consumer advocacy,” Caliban said. “Resolving this issue also allows us to fully and undividedly pay attention to the development and strengthening of our business, which is built on the basis of integrity and trust.”