Lending Giant Found Guilty of Deceptive Practices
One of the largest licensed lenders in the US has been ordered to pay a $15 million fine for engaging in “widespread illegal conduct,” which includes unauthorized withdrawals from customers’ bank accounts.
The Consumer Financial Protection Bureau (CFPB) found Enova, based in Chicago, to be in violation of their deceptive practices and has barred the firm from offering certain consumer loans.
CFPB states that Enova withdrew or attempted to withdraw funds from consumers’ bank accounts without acquiring their informed consent, canceled promised loan extensions, and misrepresented due dates for loan payments.
Repeated Offender
Enova is no stranger to fines, as it was fined $3.2 million in 2019 for similar deceptive practices. CFPB director Rohit Chopra noted that the company failed to comply with the agency’s orders to correct its behavior.
He stated, “Enova decided to keep flouting the law after it was caught taking advantage of its customers and violated a law enforcement order. Today’s action imposes a $15 million penalty, bans the company from certain lines of business, and reforms executive compensation.”
Response from Enova
Enova responded by stating that most of the errors were self-reported to CFPB and has provided appropriate redress to affected customers. The errors were attributed to unintended computer and system errors and were not deliberate attempts to avoid the law.
Enova operates its CashNetUSA and NetCredit-branded subsidiaries in 37 states, offering unsecured installment loans and lines of credit to nine million customers and has funded $52 billion in loans.
Hot Take
Despite a $15 million fine and a ban on certain lines of business, Enova’s self-incriminating practices and repeated offenses cast doubts on its commitment to ethical lending practices, putting vulnerable consumers at risk.
By
By
By
By
By