Is a Lending Lion the New Back to School Bully?
Friday Financial Fraud Roundup - August 18, 2023
Yes, that’s right. MoneyLion has some back-to-school tips.
Students, parents, and teachers all can’t wait to find out what a lending lion has to say about going back to school.
Turns out, the #1 back-to-school tip from MoneyLion is to get a $500 loan from MoneyLion.
Unless you want a debt load that lasts the whole school year, you’d be well-advised to stay away from this lending lion.
Minnesotans who borrowed from MoneyLion discovered fierce interest rates of up to 645% - which caused the state to step in and force the usurious lion to give customers refunds.
Fun fact: The Consumer Financial Protection Bureau (CFPB) cited MoneyLion for breaking the law by offering a membership that was impossible to cancel.
Refusing to allow customers to exit its membership programs and stop paying monthly fees: To access what MoneyLion markets as its “low-APR” installment loan, the company required consumers to join its membership programs and pay monthly membership fees, which ranged from $19.99 to $29. MoneyLion falsely led many consumers to believe that they could cancel their memberships at any time. In fact, MoneyLion refused customers’ requests to cancel memberships, and to stop paying membership fees, if they had outstanding loan balances. In some cases, MoneyLion refused to cancel memberships after loan payoff if consumers had any unpaid membership fees.
A Real Estate Broker/Mortgage Lender Kickback Scheme
The Consumer Financial Protection Bureau (CFPB) has fined a mortgage lender and an associated real estate brokerage firm for a lucrative and illegal kickback scheme that sent business to the mortgage lender in exchange for lavish gifts provided to the real estate operator.
Freedom Mortgage, a nonbank mortgage loan originator and servicer based in Boca Raton, Florida, was fined $1.75 million for the scheme, which the lender operated in conjunction with New York-based real estate broker Realty Connect. Realty Connect was fined $200,000.
“Freedom provided kickbacks to real estate brokers and agents — including those at Realty Connect — in return for mortgage referrals, a clear violation of federal law,” said CFPB Director Rohit Chopra. “The CFPB will be vigilant in rooting out anti-competitive behavior that interferes with consumers’ ability to choose financial products and services.”
MORE CONSUMER NEWS
Consumer Bureau Takes on Data Brokers