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September 27, 2016

CFPB orders online lender to pay $3.63M

CFPB on Tuesday ordered online lender Flurish Inc. to pay a $1.8 million civil penalty and $1.83 million in refunds to more than 50,000 consumers in response to the bureau's findings that it misled consumers about how it would help them build credit and access cheaper loans.

Flurish is based in San Francisco and did business as LendUp, offering single-payment loans and installment loans in 24 states. CFPB said the company advertised products it did not offer and did not properly give information to credit reporting companies. The bureau also said that Flurish hid the true cost of loans offered, reversed pricing without telling consumers and understated the annual percentage rates for loans.

"The CFPB supports innovation in the fintech space, but start-ups are just like established companies in that they must treat consumers fairly and comply with the law," said CFPB Director Richard Cordray.

The bureau's enforcement action was taken under the Truth in Lending Act, the Consumer Protection Act and the Dodd-Frank Act's prohibition against unfair, deceptive, or abusive acts and practices (UDAAP).

Flurish also signed a separate settlement agreement with the California Department of Business Oversight which requires the firm to pay $2.68 million for allegedly charging illegal fees and committing other violations.