Westborough lender ordered to reimburse clients
A Westborough lender has been ordered to reimburse hundreds of customers who signed up for deferred-interest loans for dental work and were allegedly told the loans were interest free.
The Consumer Financial Protection Bureau (CFPB) said the firm, Springstone Financial, has been ordered to pay $700,000 in relief to up to about 3,200 consumers who signed up for the product and were ultimately charged and paid deferred interest. The bureau said Springstone ran the program from January 2009 through December 2014.
Springstone is a subsidiary of San Francisco-based Lending Club Corp., which bought Springstone in April 2014, according to a report in The Boston Globe. Lending Club’s founder and chief executive, Renaud Laplanche, said the company pulled the product within months because they were “not up to LendingClub’s standards of transparency, consumer friendliness and responsible lending,” Laplanche said in a statement in the Globe report.
According to the CFPB, Springstone offered consumers and administered two credit products as part of the program: an installment loan and a deferred-interest loan product. The deferred-interest product incurred no interest if the balance was paid in full within a certain promotional period.
Meanwhile, a network of about 9,000 health-care providers was authorized by Springstone to offer its loan products and assist consumers in enrollment. Receptionists and office staff of these health-care providers could provide consumers with application materials and assist them in filling out the application before submitting it to Springstone on the consumers’ behalf, the bureau said in a statement.
The bureau’s investigation found that providers who were trained and monitored by Springstone to market the deferred-interest loan product misled consumers about the terms and conditions of the product during the application process, the CFFB said. In some cases, dental office staff told consumers that the deferred-interest product was a “no interest” loan and failed to mention they would have to pay 22.98 percent interest on the loan if they didn’t pay it in full by the end of the promotional period.
WBJ Web Partners
Most Recent
Most Recent
0 Comments