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.
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