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Atlanta fintech company fined for making unauthorized consumer loans

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ATLANTA — An Atlanta-based financial technology company is being fined $2.5 million following a federal investigation into complaints of unauthorized loans.

GreenSky Inc. announced Tuesday it has entered into an agreement with the U.S. Consumer Financial Protection Bureau to pay the fine and resolve consumer loans where there is insufficient evidence of customer authorization. The company did not admit any liability or wrongdoing.

GreenSky offers technology merchants can use to offer point-of-sale installment loans to consumers that its partner banks essentially fund. The company initially facilitated home improvement loans through such retailers as Home Depot but has since expanded into other areas, including elective surgery.

Between 2014 and 2019, GreenSky received at least 6,000 complaints from consumers who stated they did not authorize submission of a loan application. The company’s complaint investigations found its merchants were at fault in at least 1,600 cases.

“GreenSky’s careless business and customer service practices enabled its merchants to take advantage of vulnerable consumers who needed financial help to repair their homes and to pay for other critical retail services by setting up loans without consumers’ consent,” CFPB Acting Director Dave Uejio said. “For consumers to wind up in debt to GreenSky for loans they never knew about is simply wrong. The CFPB will not stand for practices that allow conduct like this in the marketplace.”

Besides the fine, the redress to customers called for in the agreement is capped at $9 million, including $3 million in cash and $6 million in credit through loan cancellations.

GreenSky President Tim Kaliban said the company already has implemented many of the protocols and business practices called for in the agreement.

“We are exceedingly proud of our record of consumer advocacy,” Kaliban said. “The resolution of this matter also allows us to devote our full and undivided attention to growing and strengthening our business, which is built on a foundation of integrity and trust.”

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