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Avant, LLC pays $3.85M for UDAP in loan servicing

04/15/2019
Fine Amount: 
$3.85 million
Penalty Type: 
Issued by: 

The Federal Trade Commission has announced that Avant, LLC, an online lending company as agreed to settle Commission charges that it engaged in deceptive and unfair loan servicing practices, such as imposing unauthorized charges on consumers’ accounts and unlawfully requiring consumers to consent to automatic payments from their bank accounts. The FTC charged that, in many cases, the company falsely advertised that it would accept payments by credit or debit cards, when in fact it rejected these forms of payments. The FTC also alleged that the company withdrew money from consumers’ accounts or charged their credit cards without authorization. In some instances, Avant charged consumers duplicate payments without authorization, improperly taking consumers’ monthly payments twice or more in one month. In one egregious example, one consumer’s monthly payment was debited from his account 11 times in a single day.

The Commission has also charged the online lending company with the following law violations:

  • failing to properly and timely credit payments made by check;
  • providing inaccurate payoff quotes to consumers;
  • collecting additional amounts even after consumers paid the quoted payoff amount; and
  • violating the Telemarketing Sales Rule and the Electronic Fund Transfer Act by requiring borrowers to agree to recurring automatic debits of their bank account as a condition of obtaining a loan.

Under the settlement order, Avant, LLC will be prohibited from taking unauthorized payments and from collecting payment by means of remotely created check (RCC). The company also is prohibited from misrepresenting: the methods of payment accepted for monthly payments, partial payments, payoffs, or any other purpose; the amount of payment that will be sufficient to pay off in its entirety the balance of an account; when payments will be applied or credited; or any material fact regarding payments, fees, or charges.

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