FYI: LendingClub Corp., in its prospectus when it went public in late 2014, said it was part of a “new approach to consumer finance.” The company’s website says “transforming an industry requires new ways of thinking and doing.” This type of language is common in the so-called peer-to-peer, and tech-enabled, lending space. LendUp, essentially a payday lender backed by big Silicon Valley names, including Google parent Alphabet Inc.’s venture arm, pitches itself as consumer friendly and socially conscious.
But as the peer-to-peer lending business matures, it appears increasingly to be adopting the bad habits of the industry it said it was going to improve on. Last week, the Federal Trade Commission accused LendingClub, the largest of the peer-to-peer lenders, of misleading consumers with hidden fees and continuing to charge borrowers even after they had paid off their loans. Shares of the online lender fell to nearly $2.50, its all-time low. LendingClub denies the accusations. LendUp, too, has paid fines and refunds for illegal fees and in general treating some of its customers poorly.
Regards,
Ted
https://www.bloomberg.com/gadfly/articles/2018-04-30/peer-to-peer-lending-s-new-ways-look-a-lot-like-the-old-ones
