GreenSky class action alleges company illegally collected loan fees

GreenSky class action lawsuit overview:

• Who: A California federal judge certified a class action lawsuit filed against GreenSky Inc.
• Why: Consumers allege GreenSky illegally collected loan fees.
• Where: The GreenSky class action lawsuit was filed in California federal court.

A California federal judge has certified a class action lawsuit against GreenSky Inc. over claims the company illegally collected loan fees.

U.S. District Judge Jacqueline Scott Corley granted a motion on Jan. 2 certifying a class of consumers who allege GreenSky violated California’s consumer protection laws by collecting fees from borrowers who took out loans through the company’s platform.

Judge Corley also partially granted GreenSky’s motion for summary judgment, dismissing claims related to performance fees while allowing claims related to transaction fees, also referred to as merchant fees, to proceed.

The GreenSky class action lawsuit was filed in January 2020 by plaintiff Elizabeth Belyea, who alleged the company failed to comply with state lending, credit servicing and consumer protection laws.

GreenSky removed the case to the California federal court and filed a motion to compel arbitration, which the court denied. Belyea amended her complaint to add additional plaintiffs, including Heidi Barnes, Hazel Lodge and David Ferguson.

The court later compelled arbitration for some of the plaintiffs, leaving Barnes and Ferguson as the remaining named plaintiffs.

GreenSky class action alleges violations of California’s consumer protection laws

Barnes and Ferguson allege GreenSky violated the California Credit Services Act and Unfair Competition Law by collecting transaction and performance fees, failing to provide specific disclosures and failing to register with the California Department of Justice.

The GreenSky class action lawsuit alleges the company partners with contractors and banks to provide point-of-sale loans for home improvement and home maintenance projects. 

GreenSky collects transaction fees from merchants each time a customer uses a GreenSky loan to pay for a project. 

The lawsuit alleges GreenSky encouraged merchants to pass these fees on to consumers despite prohibiting them from doing so in its merchant agreement.

Judge Corley certified a class of consumers who secured a GreenSky loan in California between Jan. 9, 2016, and the present, with a loan principal amount of $500 or higher and an associated transaction fee of at least 1% of the loan principal amount.

The judge dismissed claims related to performance fees, as the plaintiffs failed to present evidence of injury. The court also granted GreenSky’s motion for summary judgment on Barnes’ claim under the Unfair Competition Law, finding the statute of limitations had expired.

In 2020, GreenSky faced a class action lawsuit alleging it engaged in predatory lending tactics that violated state lending laws and consumer protection laws.

What do you think of the allegations in this GreenSky class action lawsuit? Let us know in the comments.

The plaintiffs are represented by David Stein, Amanda M. Karl, Delaney Brooks and Brian Johnson of Gibbs Law Group LLP, Geoffrey Graber, Madelyn Petersen and Mark Vandenberg of Cohen Milstein Sellers & Toll PLLC, Bryce Bell and Andrew R. Taylor of Bell Law LLC and Daniel T. LeBel of Consumer Law Practice of Daniel T. LeBel.

The GreenSky class action lawsuit is Belyea, et al. v. GreenSky Inc., et al., Case No. 20-cv-01693-JSC, in the U.S. District Court for the Northern District of California.

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