Consumer Bureau Action Tracker

CFPB – Springstone Financial


State

Nationwide

target

Springstone Financial, LLC

Topics

Enforcement, Add-On Products, Prepaid Cards, Credit Cards

In 2015, the CFPB ordered Springstone Financial repay $700,000 to “customers who were allegedly subjected to deceptive marketing tactics when they signed up for loans to pay their medical bills.” The CFPB alleged that some of Springstone’s customers who “were unknowingly enrolled in high-interest loans, believing the company’s products were interest free” may have been “ falsely told the loans were interest free.”

  • Springstone “was acquired in April 2014 by San Francisco-based Lending Club.” Loans were issued “from 2009 to 2014 through a network of some 9,000 health care providers who worked with the company. Consumers could apply for the loans directly from Springstone or through one of the participating health care providers.” 139,000 people had taken out loans as of December 2014. [Jim Haddadin, “Westborough company to repay $700,000,” The Milford Daily News, 08/24/15]
  • Springstone Financial customers “were required to pay off their loans during a promotional period in order to avoid interest payments that skyrocketed to nearly 23 percent after the promotional period closed.” The company failed to inform consumers that “they would accrue interest at a rate of 22.98 percent if they failed to pay off their debt by the close of the promotional period.” [Jim Haddadin, “Westborough company to repay $700,000,” The Milford Daily News, 08/24/15]
  • “About 3,200 customers who enrolled in the company’s deferred-interest loan products wound up making interest payments, according to an announcement released last week by the bureau. CFPB alleges some may have been falsely told the loans were interest free.” [Jim Haddadin, “Westborough company to repay $700,000,” The Milford Daily News, 08/24/15]
  • The company “agreed to repay $700,000 to customers” who fell prey to the loan scheme. [Jim Haddadin, “Westborough company to repay $700,000,” The Milford Daily News, 08/24/15]

Status

Inactive or Resolved


2015-CFPB-0021 8/19/2015 8/19/2015

CFPB Takes Action Against Springstone Financial for Deceptive Health-Care Credit Enrollment Tactics
http://www.consumerfinance.gov/policy-compliance/enforcement/actions/springstone-financial/

  • Consumer Financial Protection Bureau (CFPB)
  • Administrative filing
  • None
  • Nonbank
  • $700,000
  • 3,200

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