The Federal Trade Commission announced it has resolved its investigation of online lender SoFi, following a public comment period.
According to an FTC press release, the government agency has approved a final consent order with SoFi that resolves it of allegations that it misrepresented how much student loan borrowers saved by refinancing with the online lender or how much they could save working with the company. In October the FTC filed a complaint against SoFi contending it made false statements that were prominent about loan refinancing. The claims were made in television, print and in online ads. The complaint also accused SoFi of overstating the actual average savings from refinancing, in some cases doubling it simply by excluding large segments of consumers.
Under the consent order, SoFi can’t misrepresent to consumers how much they can or have saved using SoFi products. It is also prohibited from making any claims about savings unless it has the evidence to back it up. The FTC voted 5-0 to approve the final consent order, noted the government agency.
SoFi and the FTC reached a proposed settlement in October in which the FTC said then that if SoFi violates the order it may face civil penalties. At the time FTC Commissioner Rohit Chopra said that while the FTC’s settlement doesn’t require SoFi to pay any money for the conduct, “Ideally, SoFi would pay civil penalties for violating the law. Due to limitations in the FTC’s authority, the agency cannot seek civil penalties in matters like these. However, the Consumer Financial Protection Bureau and the State Attorneys General would be able to seek penalties from SoFi under existing federal law,” he said.
The consent order comes at a time when SoFi is struggling. Results for its third quarter, which it reported in November, showed an adjusted loss of around $12 million before interest, taxes, depreciation and amortization. It marks the second quarter in a row of losses.