Avant, a Chicago, Illinois-based online lending platform, as per recent reports, has agreed upon to come in clean with the Federal Trade Commission (FTC) and will be paying $3.85 million in settlements to harmed consumers, on charges of “deceptive or unfair loan servicing practices” by the federal commission.
The FTC, in its multiple charges filed against the Chicago-based lending platform, claimed the platform’s unauthorized practice of charging duplicate payments from consumers – on one account the platform charged a customer 11 times for the monthly payment settlement, all this in just one day.
The other charges that FTC included are: falsely advertising that credit or debit card payments are accepted, before rejecting such payments; withdrawing money from consumers’ accounts or imposing charges without authorization; failing to properly process cheque payments; and violating the Telemarketing Sales Rule and Electronic Fund Transfer Act by requiring borrowers to agree to recurring automatic debits of their bank account as a condition of obtaining a loan.
Furthermore, FTC also accused Avant of providing inaccurate payoff quotes to borrowers. The Chicago-based lender, as per FTC, continued to collect payments even after the quoted amount was paid off.
“We have alleged that Avant gave the run-around to consumers trying to repay their loans, because of systemic issues with the company’s loan servicing platform,” states Andrew Smith, director of the FTC’s Bureau of Consumer Protection. “Online lenders need to understand that loan servicing is just as important to consumers as loan marketing and origination, and we will not hesitate to hold lenders liable for unfair or deceptive servicing practices.”
Under the terms of the settlement order with the FTC, Avant will now be prohibited from collecting unauthorized payments from consumers’ account, along with remotely created cheque payments and misrepresenting several features of their services.