Online Lender Enova Settles With CFPB

Through a settlement with online lender Enova International, Inc., The Consumer Financial Protection Bureau (CFPB) announced on Friday (Jan. 25) that the company would, among other conditions, pay a civil money penalty of $3.2 million. The company also is prohibited from initiating electronic fund transfers without valid permission through the terms of a consent order.

By debiting the bank accounts of its users without authorization, the company violated the Consumer Financial Protection Act of 2010, the Bureau claimed. The statement did note that consumers had given permission to the company to deduct payments from some accounts. But, “in many instances,” the company debited different accounts that had not been authorized by consumers. In addition, the bureau said the company didn’t honor loan extensions that it had given consumers.

Enova Chief Compliance Officer and General Counsel Sean Rahilly said in a press release, “Any errors in our systems, especially those that impact our customers, are taken very seriously by our team, and we have invested in technology and processes to ensure appropriate resolution of such errors.” He added that the company “self-reported” the issues in 2014 to the bureau.

In the release, the company also said the consent order with CFPB “covers two payment processing issues that, combined, impacted less than 0.2% of total payments processed by Enova during the period in which the errors occurred.” The company added that the “technical processes that caused these errors” were fixed and that “customers were contacted for remediation of damages they may have incurred.”

Enova provides online financial services to small businesses and non-prime consumers. The company said in the release that it has provided access to over $20 billion in loans as well as financing to over 5 million people worldwide. In addition, the company said it provides on-demand technology for real-time predictive analytics and decision-making through its Enova Decisions™ brand.