Kabbage lawsuit claims company provides false, misleading PPP loan information

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Kabbage PPP loans lawsuit overview: 

• Who: LaDonna Wiggins filed a lawsuit against American Express Kabbage Inc. 
• Why: Wiggins claims Kabbage gave her false information during the PPP loan application process, damaging her business brand and personal reputation. 
• Where: The complaint was filed in Texas federal court. 

Kabbage Inc. and its affiliates gave misleading and false information to an individual applying for a Paycheck Protection Program (PPP) loan as part of the Coronavirus Cares Act, a new lawsuit alleges. 

Plaintiff LaDonna Wiggins claims Kabbage and its affiliates “grossly misrepresented” the calculation of the PPP loan, the context of the fund use and the documents required. 

Wiggins argues Kabbage’s alleged misconduct damaged her business brand and personal reputation. She also alleges “serious criminal allegations that directly resulted from the financial advice provided by Kabbage and its representatives.” 

“Kabbage and its affiliates were grossly negligent in the PPP approval process because they provided false/misleading information during the application process,” the Kabbage lawsuit states. 

Wiggins argues a Kabbage representative gave her incorrect information about how she needed to calculate payroll data after she contacted the company to inquire about her PPP loan eligibility. 

Further, Wiggins claims Kabbage “intentionally processed loans they guaranteed would be approved without auditing the documents” and displayed “financial misconduct” by notifying her that any of the funds not approved for forgiveness through the PPP loan process would be “treated as a regular business loan with a 1% interest.” 

Kabbage lawsuit claims company profited approximately $340 million through loan origination fees

Kabbage and its affiliates profited approximately $340 million through loan origination fees, according to the Kabbage lawsuit, which argues this made it an attractive target for acquisition. American Express acquired it for $850 million on or around August 2020.

A Congressional Select Subcommittee is investigating Kabbage for its PPP fraud involvement, according to the lawsuit. 

Wiggins requests a total award of around $260 million in damages for loss of contracts and future income, reduced quality of life and punitive damages. 

Last October, consumers hit Prestamos with a lawsuit over allegations the lender pocketed the government fees for PPP loan applications, while failing to fund the applicants as promised. 

Did you apply to take out a PPP loan during the COVID-19 pandemic? Let us know in the comments. 

The Kabbage lawsuit is Wiggins, et al. v. American Express Kabbage Inc., et al., Case No. 4:22-cv-03302, in the U.S. District Court for the Southern District of Texas.

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