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The Consumer Financial Protection Bureau ( CFPB ) is suingSoLo Funds , a fintech company that enables peer - to - equal loaning , alleging that the company used “ digital dark patterns ” to deceive borrower and lawlessly took fees while advertise to consumers that there were no fee .
“ The CFPB is suing SoLo for using digital trickery to obscure interest and fees on its online loans , ” CFPB Director Rohit Chopra articulate in a May 17 press release announce the causa . “ SoLo has had repeated running - atomic number 49 with commonwealth regulators , and we are putting a check to their imitation tipping schema . ”
The CFPB also aver that the company misrepresent the cost of loanword , interfered with the power of consumers to understand what they were match to , accumulate on loans they should n’t have and made false scourge related to credit coverage . CFPB also state that SoLo Funds ’ business model did not supply safeguards .
Rodney Williams and Travis Holoway pop SoLo Funds in 2018 to provide loaning to underserved Americans , especially those who are often targeted by predatory lending practices due to their low- to middle - class status .
The company raised some $ 13 million in speculation - endorse backing , consort to Crunchbase . TechCrunchprofiled the troupe in 2021when it raised $ 10 million in Series A backing . Along the way , SoLo Funds pull some high-pitched - visibility investor , including Serena Ventures , ( founded by lawn tennis fable Serena Williams ) , Endeavor Catalyst , Alumni Ventures and Techstars .
In 2023,SoLo investment company said it reached 1 million registered usersand more than 1.3 million downloads .
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Meanwhile , this new lawsuit lend to the recent troubles that have plagued the company . Last year , the company settle several lawsuits with entities , including the District of Columbia and the State of California , foralleged predatory lending drill , and the Connecticut Department of Banking regarding a 2022 irregular cease - and - desist order .
Then in December 2023,SoLo cash in hand was in the news again , this time touch to being investigated by the State of Maryland .
Regarding the novel CFPB causa , SoLo Funds claim in a statement to TechCrunch that it was voluntarily working toward a regulative fabric with the CFPB for the last 18 month . It said that on May 16 , both entity principally agree on a path forward and , said “ we were blindsided the next dawn with a wooing . ”
SoLo Funds chief operating officer Travis Holoway say in a program line that “ nonage groundbreaker were gainsay to create new model to address our residential area ’ fiscal inequalities . ” And now that the company is doing that , the “ governor seem driven by printing press firing when they should be motivate by true consumer trade protection and empower equitable answer . ”
The CFPB say it is action to change SoLo Fund ’s practices , for refund to customer and for fiscal penalty such as disgorgement , damages and possibly extra polite penalty fee . CFPB aims to “ keep future violations , monetary relief in the form of remediation to consumers , emesis of badly - get gains , and damages , and the infliction of civil money penalty . ”
