Oakland-based digital loan provider LendUp Loans LLC is scheduled to distribute $40 million in compensation to 118,101 customers on May 8, 2024. The settlement follows accusations that the company misled its customers about its loan product offerings.
Impacted customers will begin receiving portions of the compensation on May 8, 2024, a step to rectify the damage caused by the company’s misleading information.
LendUp Loans LLC has been under scrutiny for its “LendUp Ladder” promotional campaign. This initiative promised borrowers the opportunity for larger loans with reduced interest rates, contingent upon timely payments and taking free courses on the company’s website. However, several customers reported no changes or even increases in interest rates despite their adherence to the program.
Additionally, several borrowers reported that they were unable to access the promised larger loans, even after diligent adherence to the LendUp Ladder scheme.
The compensation, totalling $39,833,748.87, is overseen by Epiq Systems, an arbitration service dealing with dispute resolutions.
Compensation for misled LendUp customers
This large sum is the result of multiple court rulings against LendUp Loans due to deceptive business practices allegations.
Over the years, LendUp Loans has faced various regulatory actions, from directives to stop making misleading claims about its borrowing benefits to charges for violating the Military Lending Act. These events have led to a loss of trust among investors and stakeholders, consequently interrupting the company’s growth trajectory.
To tackle these setbacks, LendUp Loans is revising its operational strategy to focus more strictly on regulatory compliance and reputation rebuilding. This includes the promise of a rigorous compliance system and transparent communication with investors and the military community, a sector previously affected by the company’s regulatory failings.
Following the recent court ruling, LendUp Loans is now barred from launching new loans, collecting certain active loans, sharing false information about lending, and sharing customer data, among other restrictions. This significant verdict reflects the gravity of the charges against LendUp Loans and rings as a crucial reminder for all businesses about their legal and ethical duties to their customers.
Current customers can visit the company’s website for further information on their compensation disbursement, which will include comprehensive guidelines and updates concerning the compensation process. For more support, the website offers numerous means to contact their dedicated customer service team.
