The CFPB has fined LendUp, a company once heralded as one of the "best in show" among fintech companies, $3.6 million for deceiving its customers.
In announcing the fine, the CFPB said that the company failed to give consumers the opportunity to build or improve credit.
"LendUp pitched itself as a consumer-friendly, tech-savvy alternative to traditional payday loans, but it did not pay enough attention to the consumer financial laws," CFPB Director Richard Cordray, said, as he announced the fine. "The CFPB supports innovation in the fintech space, but startups are just like established companies in that they must treat consumers fairly and comply with the law."
Flurish, which does business as LendUp, is a San Francisco-based online lending company that offers single-payment and installment loans in 24 states. The company touts its loans as a way for consumers to obtain credit and improve their credit scores.
The company failed to provide those services, the CFPB said.
The agency ordered the company to provide more than 50,000 consumers with about $1.83 million in refunds and pay a $1.8 million civil penalty.
In 2013, LendUp was cited as one of the "best in show" at Finovate, a conference that features banking technology tools.
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