How Dangerous IS MoneyLion?
I’ve written before about fintech lender MoneyLion and their penchant for skirting the law. Such as in Minnesota where they were caught charging interest rates in excess of 600%.
Minnesota Borrowers to Receive Refunds in State’s Settlement with MoneyLion
Online Lending Platform Offered Loans with Rates Up To 645%
Now, the Consumer Financial Protection Bureau (CFPB) is suing MoneyLion alleging the company violated the Military Lending Act by charging servicemembers interest rates in excess of 36%. It is also alleged that MoneyLion refused to cancel memberships — and kept charging fees even after customers asked to cancel or paid loans in full.
Here’s more from NewsBreak:
“MoneyLion targeted military families by illegally extracting fees and making it difficult to cancel monthly subscriptions,” said CFPB Director Rohit Chopra. “Companies are breaking the law when they require monthly membership fees to obtain loans and then create barriers to canceling those memberships.”
The CFPB is suing to enforce the Military Lending Act and is alleging MoneyLion’s actions harmed consumers by:
- Overcharging and deceiving servicemembers and military dependents: MoneyLion imposed membership fees on covered borrowers that, when combined with loan-interest-rate charges, exceeded the Military Lending Act’s 36% rate cap. MoneyLion deceived these borrowers by representing that they owed loan payments and fees that they did not actually owe because the loans were void under the Military Lending Act.
- Refusing to allow customers to exit its membership programs and stop paying monthly fees: To access what MoneyLion markets as its “low-APR” installment loan, the company required consumers to join its membership programs and pay monthly membership fees, which ranged from $19.99 to $29. MoneyLion falsely led many consumers to believe that they could cancel their memberships at any time. In fact, MoneyLion refused customers’ requests to cancel memberships, and to stop paying membership fees, if they had outstanding loan balances. In some cases, MoneyLion refused to cancel memberships after loan payoff if consumers had any unpaid membership fees.
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