After facing claims that it misled customers, the online lender LendUp has beefed up its legal department in hopes of proving that it’s turned over a new leaf. But was a lack of lawyers really the problem in the first place?
State and federal regulators announced in late September that LendUp, a San Francisco-based startup, agreed to pay $6.3 million to resolve allegations that it illegally charged customers fees, miscalculated interest rates and falsely advertised loans that weren’t available. “LendUp pitched itself as a consumer-friendly, tech-savvy alternative to traditional payday loans, but it did not pay enough attention to the consumer financial laws,” said Richard Cordray, director of the Consumer Financial Protection Bureau, which investigated LendUp, in a statement.
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