LendingClub has been charged with deceiving consumers by advertising loans as having no hidden fees when it in fact collected “hundreds or even thousands of dollars” as an upfront fee.

The U.S. Federal Trade Commission said Wednesday that the peer-to-peer lender effectively hid the upfront fee — amounting on average to about 5% of the requested loan amount — in materials on its website and mobile app.

LendingClub’s individual loans range from $1,000 to $40,000 and have terms of 36 or 60 months. It sells the high-yield debt to investors through a marketplace.

“Although Defendant tells consumers that its loans contain ‘No hidden fees,’ defendant nevertheless charges consumers an upfront fee that is not clearly and conspicuously disclosed,” the FTC said in a civil complaint that alleges claims of unfair or deceptive business practices.

As a result of the fee, the complaint said, “When the loan funds arrive in consumers’ bank accounts, they are hundreds or even thousands of dollars short of expectations.”

LendingClub denied the charges in a statement, saying its fee disclosures “are clear and transparent and are prominently disclosed throughout our website.” But its shares plummeted 15% to $2.77 in trading Wednesday.

“This case demonstrates the importance to consumers of having truthful information from lenders, including online marketplace lenders,” Reilly Dolan, acting director of the FTC’s Bureau of Consumer Protection, said in a news release. “Stopping this kind of conduct will help consumers make informed choices about loan offers.”

According to the FTC, consumers have frequently complained to LendingClub that they were not aware of the upfront fee, with one consumer reporting he “applied for $15,000 to cover relocation expenses, and was surprised to receive only $14,000 — an amount insufficient to cover his relocation — after defendant deducted a $1,000 upfront fee.”

The FTC said LendingClub’s disclosure on its website consisted only of a “tooltip,” which, if clicked, reveals a pop-up bubble containing a small-print disclosure.

One of the company’s own investors, the commission said, warned it that the upfront fee “is not clear and conspicuous and could be subject to [an unfair practices] claim.”

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