LendUp Loans Failed to Fulfill Promise of Better Loan Terms to Repeat Borrowers, New Class Action Lawsuit Alleges

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

LendUp Loan Class Action Lawsuit Overview:

• Who: LendUp Loans, LLC.
• What: LendUp Loans is accused of not fulfilling the agreement to offer customers better loan terms for borrowing on multiple loans, a new class action claims.
• Where: California

LendUp Loans offered customer’s a program where repeat borrowers could get better loan terms, but customers never saw those improved loan terms, a new class action lawsuit alleges.

In fact, LendUp Loans offered those borrowers the same or even worse terms and interest rates, according to the class action. The plaintiff, the Consumer Financial Protection Bureau, filed the complaint against LendUp Loans, LLC. on Sept. 8 in a California federal court, alleging violations of the Consumer Financial Protection Act (CFPA) and the Equal Credit Opportunity Act (ECOA).

The bureau alleges LendUp marketed a loan offer that it did not follow through with.

“LendUp claimed to offer larger loans at lower rates to repeat borrowers who ascend its ‘LendUp Ladder,’” the complaint states. “But many borrowers who reached higher LendUp Ladder levels did not, in fact, receive these promised benefits.”

The complaint states LendUp made these allegedly unfulfilled marketing claims despite a 2016 Bureau Consent Order prohibiting it from making misrepresentations about the benefits of borrowing from LendUp. 

LendUp Borrowers Received Higher Interest Rates With Repeat Loans, Class Action Lawsuit Alleges

According to LendUp’s marketing, borrowers who repaid loans on time and took free courses offered through LendUp’s website would earn “points” that would allow them to “climb” to higher on the LendUp Ladder level, where they could access lower interest rates and larger loan amounts, the complaint says.

“In fact, many repeat borrowers who ascended to higher Ladder levels did not receive lower interest rates; they received the same or higher rates compared to their previous loans.” 

The bureau is also suing to address LendUp’s alleged failure to provide timely and accurate adverse-action notifications to loan applicants. 

The lawsuit is seeking to permanently enjoin LendUp from committing future violations of the CFPA and the Bureau’s 2016 Consent Order, as well as an injunction, disgorgement of profits, a monetary penalty, costs and fees.

Lawsuits brought by the Consumer Financial Protection Bureau can sometimes end in million-dollar settlements. 

In December 2020, ​​Nationstar Mortgage agreed to settle an action commenced by the Consumer Financial Protection Bureau for $91 million to resolve allegations surrounding mortgage servicing misconduct and deceptive practices that resulted in financial harm to borrowers.

Did you take a loan from LendUp? Let us know your experience in the comments!

The plaintiff is represented by Cara M. Peterson, Jeffrey Paul Ehrlich and Kara K. Miller of the Consumer Financial Protection Bureau. 

The LendUp Loans Class Action Lawsuit is Consumer Financial Protection Bureau v. LendUp Loans, LLC, Case No. 3:21-cv-06945, in the U.S. District Court Northern District of California. 

Read About More Class Action Lawsuits & Class Action Settlements:

• Nationstar Mortgage Agrees to $91M Settlement with the CFPB
• RoundPoint Mortgage Harasses Customers, Threatens Illegal Fees, Class Action Alleges
• What Is a Non Sufficient Fund Fee and When Must You Pay It?
• Honda Financial Illegally Keeps Millions in GAP Waiver Fees From Drivers, Class Action Alleges