LendingClub will pay $18 million to settle a longstanding dispute with the Federal Trade Commission over allegedly hidden fees.
The San Francisco lender said in a press release Wednesday that the funds would be used for “consumer remediation.” LendingClub did not admit any liability as part of the settlement.
“While we have never agreed with the FTC’s allegations, we appreciate the important role the FTC plays to protect consumers and are pleased to have reached an agreement that resolves the agency’s concerns,” Brandon Pace, LendingClub’s chief administrative officer, said in the release.
LendingClub also agreed to “clearly and conspicuously” disclose any origination fees borrowers must pay before getting a loan, according to the FTC.
“Companies that profit by preying on consumers don’t just harm the families they cheated – they also harm their competitors that play by the rules,” Samuel Levine, acting director of the FTC’s consumer protection bureau, said in a separate press release. “LendingClub fleeced consumers looking for a loan online, and will pay $18 million for its alleged misconduct.”
The FTC filed a lawsuit against LendingClub in 2018, claiming the company misled customers by advertising “no hidden fees” even though it charged some borrowers origination fees of $1,000 or more.