Enova International Fined $15 Million for Illegal Behavior
The U.S. Consumer Financial Protection Bureau (CFPB) has handed out a $15 million fine to Enova International for their alleged illegal behavior. This includes deceptive practices towards customers regarding loans and a violation of a 2019 order issued by the agency.
According to the regulator's statement on Wednesday, the investigation into Enova's compliance with the 2019 order revealed that the online lender continued to engage in illicit activities, affecting over 111,000 consumers. Consequently, Enova has been prohibited from offering certain consumer loans and is required to compensate customers harmed by their illegal conduct. Additionally, the company must now link executive compensation to their adherence to federal consumer financial protection laws.
The CFPB's latest allegations suggest that Enova has persistently withdrawn funds from customer accounts without consent. Moreover, in some instances, they have used borrowers' bank account details obtained from online lead generators, rather than relying on the account information provided by the borrowers themselves.
Enova Faces Allegations of Loan Extension Cancellations and Misrepresentation
Enova, a prominent lender, is facing allegations from the Consumer Financial Protection Bureau (CFPB) regarding the cancellation of loan extensions granted to certain borrowers. According to the CFPB, Enova not only canceled these extensions but also debited those customers' accounts for the full loan payment instead of a smaller loan extension fee.
Furthermore, Enova failed to inform borrowers with loan extensions that making an interim partial payment on the loan would lead to the cancellation of the extension. The CFPB also stated that the lender misrepresented the due dates and other terms associated with certain loan payments.
Enova, however, has responded to these allegations in a statement released on Wednesday, claiming that the majority of the issues were self-reported and resulted from unintentional technical systems and processing errors which have already been rectified. Ranning Li, Enova's President of Consumer Lending, added that while these issues affect only a small fraction of their customers and transactions, the company remains committed to treating customers fairly and improving business practices to minimize errors and address matters promptly.
In spite of its disagreement with the CFPB's characterization of the issues, Enova is pleased to have resolved the matter. The $15 million penalty imposed by the CFPB is not expected to have any significant impact on the company's operations.
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