SoLo Funds in Trouble Again
Interest rates now ONLY 1000%
Fintech loan broker SoLo Funds says they are playing by a different set of rules.
Opening access to credit for people who historically have been denied.
Which sounds neat, until you examine the details.
The company previously faced heat for offering loans with effective APR interest up to 4000%.
Not exactly a benefit to people already struggling to access credit.
After being shut down in a few states, they pledged to make a comeback.
A Payday Predator Plots its Return
Now, though, SoLo faces a lawsuit from the Consumer Financial Protection Bureau (CFPB) alleging the company’s “tipping” option amounts to a mandatory fee and that loans brokered on the platform can carry interest rates in excess of 1000%.
“The CFPB is suing SoLo for using digital trickery to hide interest and fees on its online loans,” said CFPB Director Rohit Chopra. “SoLo has had repeated run-ins with state regulators, and we are putting a stop to their fake tipping scheme.”
In fact, an investigation found that only 0.5% of loans funded on the SoLo platform carried no tip or other fee.
SoLo is back, alright. Back up to their old tricks of preying on the most vulnerable borrowers.
When consumers reach the part of the application that asks them to pay a fee to SoLo, consumers only see options for what percentage to give—none of the options is zero.