The Consumer Finance Protection Bureau (CFPB) said LendUp Loans had to pay a penalty of $ 100,000, stop issuing loans and stop collecting some delinquencies after the company received too many deceptive marketing complaints, Reuters reported .
CFPB Director Rohit chopra said the agency was shutting down the company’s lending operations for “repeatedly lying and illegally deceiving its clients,” according to the report.
LendUp Loans offers financing to online clients who have generally been overlooked as too risky, the report says.
LendUp allegedly deceived its customers about the benefits of repeat borrowing and violated a similar order from 2016, according to the report. He also failed to provide accurate and timely notice of adverse action, which is required by law.
The CFPB said LendUp agreed with the order, according to the report.
PayPal was among LendUp’s investors in 2017, as part of the payments giant’s efforts to get ahead of its competitors in the digital payments market, according to the report.
The order came after a CFPB trial in September alleging that LendUp continued to violate a 2016 order.
Read more: CFPB sues LendUp alleging online lender breached consent order
At the time of the 2016 order, the CFPB fined LendUp $ 1.83 million in consumer redress and a civil penalty of $ 1.8 million.
“For tens of thousands of borrowers, the LendUp Ladder was a lie,” said Dave Uejio, CFPB’s acting director at the time, referring to ads run by LendUp saying that repeated borrowing could help consumers save money. “climb the LendUp Ladder”.
“Not only has LendUp structured its business around massive deception and keeping borrowers in debt cycles, but the business has doubled after getting caught for the first time. We will not tolerate this illegal scheme and will not allow this company to continue to prey on vulnerable consumers, ”Uejio added.