US lender Enova slapped with a $15m fine in addition to a ban from offering short-term loans

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United States-based payday lender Enova received a $15 fine by the Consumer Financial Protection Bureau (CFPB). In addition to the fine, the lender was also banned from offering short-term loans to its customers.

What did Enova do?

The ban and the fine both come as a consequence of “widespread illegal conduct,” as the US consumer watchdog found that the company withdrew its own customers’ funds from their bank accounts without their consent. In addition, it also made false statements about loans in order to deceive users, and it canceled their loan extensions on occasion.

Furthermore, the harsh punishment comes from the fact that Enova is actually a repeat offender in this regard. Back in 2019, the company received a $3.2 million fine, coupled with the order to clean up its act. However, as it would appear, the company did not heed the warning.

Not only did it continue to deceive customers and break the law, but it violated the 2019 order, hence its ban from offering certain consumer loans from now on. In addition, it was also ordered to provide redress to all of the customers that its behavior has harmed, plus it has to tie executive compensation to the firm’s compliance with federal consumer financial protection laws.

Rohit Chopra, the acting director at CFPB, stated that Enova decided to keep flouting the law, even after it was already caught taking advantage of consumers. In doing so, it did not only violate the law, but also the law enforcement order, leading to today’s action that imposed a $15 million penalty and a ban from certain lines of business.

Enova blames technical systems and processing errors

The company responded to the new penalty and ban by saying that the issues that the Consumer Financial Protection Bureau has detected actually only affected a smal portion of its user base. It also noted that the problems arose from what it called “the unintentional technical systems and processing errors,” which have supposedly been addressed since coming to light.

The company’s president of consumer lending, Running Li, further commented that the firm is taking all errors in its system very seriously, particularly when it comes to those that might negatively affect the customers. They intend to continue investing in their technology, compliance processes, and systems they use in order to prevent, identify, and ensure appropriate resolution of errors.

About Ali Raza PRO INVESTOR

Ali is a professional journalist with experience in Web3 journalism and marketing. Ali holds a Master's degree in Finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of leading cryptocurrency publications including Capital.com, CryptoSlate, Securities.io, Invezz.com, Business2Community, BeinCrypto, and more.