FinTech settles CFPB commission for issuing unauthorized loans – Technology

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United States: FinTech Company Settles CFPB Commission for Unauthorized Lending

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Fintech company dedicated to initiating and maintaining settled The CFPB charges a fee for facilitating and processing loans to consumers who have not requested them.

The CFPB found that a FinTech company that relied on sellers to promote and receive credit applications from consumers at points of sale used processes that allowed sellers to apply for credit online without the knowledge or consent of consumers. According to Consent orderThe CFPB found that between 2014 and 2019, the FinTech company received at least 6,000 complaints from consumers who said they did not authorize loan applications. Some consumers first became aware of a loan when they noticed the name of a FinTech company on their credit report or received account statements, collection letters and calls from the company.

As a result, the CFPB discovered that the company was committing fraudulent acts and acts in violation of 12 USC 5531 (“Prohibition of unfair, deceptive or abusive acts or practices”) and 12 USC 5536 (“Prohibited Activities”).

To clear the charges, the company agreed to, among other things, (i) refund or cancel loans of up to $ 9 million to affected consumers, (ii) pay a $ 2.5 million fine in civil money, and (iii) implement new procedures. designed to prevent future fraud.

main sources

  1. CFPB Press Release: CFPB Takes Action Against Fintech Company GreenSky for Allowing Sellers to Get Consumer Loans Without Their Authorization
  2. TsPPB Order: LLC “Grinsky”

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