SoLo Funds, Inc.
On May 17, 2024, the Bureau filed a lawsuit against SoLo Funds, Inc. (SoLo), a fintech company that operates a nationwide website and mobile-application based peer-to-peer lending platform through which consumers can obtain small-dollar, short-term loans. SoLo markets its lending platform to consumers as a consumer-friendly alternative to high-cost, short-term loans. According to SoLo’s website, the SoLo Platform has disbursed over a million loans since 2018. The Bureau alleges that SoLo’s advertisements and loan disclosures tout no-interest loans when, in fact, virtually all loans on the SoLo Platform include a lender “tip” that goes to the lender, a SoLo “donation” that goes to SoLo, or both. The Bureau alleges that SoLo also misrepresented key terms about the total cost of credit in its promissory notes and disclosures. The Bureau also alleges that SoLo materially interfered with consumers’ ability to understand what fees they were required to pay by obscuring consumer’s ability to opt out of a SoLo “donation.” Further, the Bureau alleges that SoLo engaged in unfair, deceptive, and abusive conduct by servicing and collecting on loans that are void and uncollectible because they were either made without a required state license or in excess of state usury caps in the state where the borrower resides. When collecting on debt, the Bureau alleges that SoLo has also misrepresented to consumers that it will furnish negative information to credit bureaus when, in fact, it never did. The Bureau alleges this conduct violated the Consumer Financial Protection Act of 2010 (CFPA). The Bureau further alleges that SoLo violated the Fair Credit Reporting Act by not implementing reasonable procedures to assure the maximum possible accuracy of its proprietary credit score, “SoLo Score,” which it provided to lenders to evaluate prospective borrowers, as well as information regarding the number of loans a borrower repaid. The Bureau seeks, among other things, injunctions against SoLo to prevent future violations, monetary relief in the form of redress to consumers, disgorgement of ill-gotten gains, and damages, and the imposition of civil money penalties.
Related documents
Press release
CFPB Sues SoLo Funds for Deceiving Borrowers and Illegally Extracting Fees