by: Elizabeth Balboa, Benzinga Staff Writer
The Federal Trade Commission has sued LendingClub Corp LC 9.66%, accusing the online lender of deceiving clients with hidden fees, withdrawing double payments from client accounts and continuing to charge borrowers even after they paid off loans.
The lawsuit alleges LendingClub failed to confirm consumers' acknowledgement of its information-sharing policy; falsely told loan applicants their loans were investor-backed to delay pursuits of loans elsewhere; and falsely and outspokenly promised loans with "no hidden fees."
The complaint filed in U.S. District Court Wednesday accuses the firm of ultimately causing “substantial injury to consumers."
Benzinga left messages with LendingClub on Wednesday seeking comment on the lawsuit.
Why It’s Important
So far, no Street authorities have commented on the case and whether it affects the bull-leaning consensus. The Buy-Hold ratio for LendingClub remains 6-10, and no analysts have Sell ratings on the stock.
Several companies in the lending space will be on hand at the Benzinga Global Fintech Awards next month. These fintech companies look to disrupt the current model, and this event is a chance to showcase the leading minds and disruptors in financial technology.
The FTC said it's intent on ending LendingClub's practices.
“Stopping this kind of conduct will help consumers make informed choices about loan offers," Reilly Dolan, acting director of the FTC’s Bureau of Consumer Protection, said in a statement.
LendingClub's stock was trading at $2.94 at the time of publication Wednesday, down 9.82 percent on the day.
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