Eric has served in leadership positions in a number of high profile, complex financial lawsuits. He has been recognized as a Daily Journal, among the Top 100 Super Lawyers in Northern California, and a Law360 MVP for Consumer Protection.
Our attorneys are investigating allegations that LendingClub lured prospective borrowers by promising “no hidden fees,” but deducted hundreds or thousands of dollars of origination fees from customers’ bank accounts. According to a complaint by the Federal Trade Commission, LendingClub’s compliance department warned it that its fees were “likely to mislead the consumer,” but LendingClub continued its advertising practices anyway.
LendingClub Loans for Active Duty
Members of the military have special rights under the Military Lending Act that protect them when seeking personal loans while on active duty, including the right to have a dispute filed in court.
If you received a LendingClub loan while on active duty, contact our attorneys to learn more about your rights.
FTC: LendingClub Conceals Fees
The FTC complaint alleges that LendingClub’s advertising frequently touts that it has no hidden fees, including in online banner advertisements, paid blog posts, television and radio advertising, and even through the mail. However, when LendingClub presents consumers a loan offer, it obscures an origination fee it deducts from the loan amount it promises. As a result, the amount of money that LendingClub disburses to borrowers is substantially smaller than the promised loan amount. LendingClub also charges interest on the money it deducts as an origination fee, even though customers never receive the money in their account.
On desktop computers, a small green dot appears next to the word APR. This green dot mentions an up-front origination fee collected out of the borrower’s loan proceeds. If a borrower does not click on this green dot, there is no disclosure on this page where a customer could learn about the origination fee.
On a mobile device, there is no green dot. If a borrower happens to tap on the APR, a popup would show that mentions the origination fees.
According to the FTC complaint, LendingClub is well aware that many consumers don’t know about the origination fee. LendingClub’s training materials list “I didn’t receive the full loan amount” as one of the two main post-disbursement complaints from borrowers. LendingClub quarterly complaint reviews have proposed “highlighting [the] origination fee” to lower the number of complaints. Similarly, one LendingClub compliance review noted: “The origination fee is disclosed on the offer page tooltip, but is not readily apparent unless an applicant clicks on the tooltip. This omission could be perceived as deceptive as it is likely to mislead the consumer.” According to one LendingClub investor, LendingClub ads “prominently state [ ] there are ‘No Hidden Fees’ yet the documents we reviewed contain a large ($300 to $450) origination fee that only appears once.”
LendingClub Misled Consumers About Loan Approvals, FTC Says
In addition to the hidden fee described above, the FTC complaint explains that LendingClub tells borrowers that their loan has been approved before the borrower’s application is actually approved. In reality, LendingClub performs additional credit review processes and rejects tens of thousands of borrowers after it has already told them that their loan was approved. According to the FTC complaint, this may cause borrowers to turn down offers from competitors or stop looking for credit because they believed they already obtained a loan from LendingClub.
Girard Gibbs Financial Fraud Experience
Girard Gibbs’ financial fraud and securities lawyers have more than two decades of experience prosecuting fraud. Our attorneys have successfully litigated against some of the largest companies in the United States, and we have recovered more than a billion dollars on our clients’ behalf.
We have fought some of the most complex cases brought under federal and state laws nationwide, and our attorneys have been recognized with numerous awards and honors for their accomplishments, including Top 100 Super Lawyers in Northern California, Top Plaintiff Lawyers in California, The Best Lawyers in America, and rated AV Preeminent (among the highest class of attorneys for professional ethics and legal skills).
Noteworthy Financial Fraud Cases
|American Express Financial Advisors Securities Litigation||$100 million cash settlement for clients alleging American Express steered them into under-performing “shelf space funds” to reap kickbacks|
|Chase Bank “Check Loan” Litigation||$100 million settlement for consumers alleging Chase offered long-term fixed-rate loans, only to later more-than-double required payments|
|Peregrine Financial Group Customer Litigation||Settlements worth $75 million for futures and commodities investors who lost millions in the collapse of Peregrine Financial Group, Inc.|
|NantHealth||Court-appointed Co-Lead Counsel in a securities class action alleging the company’s founder violated federal securities law and artificially inflated stock prices|
David’s advocacy has generated major recoveries for consumers impacted by financial fraud. He was named to the Top 40 Under 40 by Daily Journal and a “Rising Star in Class Actions” by Law360.
Michael has over 20 years of experience representing individuals in complex cases involving banking credit card and other financial frauds.
Share this on: