Payday loans startup LendUp is being made to pay $3.6m by the Consumer Financial Protection Bureau for widespread violation of payday and instalment laws.
The company aims to provide risky borrowers who may not be able to receive bank loans and has received more than $100m in funding from investors including GV, Andreessen Horowitz and Data Collective.
The fine comes after an investigation found that between 2012 and 2014 the company charged illegal fees, miscalculated interest rates, wrongly advised borrowers that its loans would help to improve their credit score and falsely advertised its loans.
The company claims these where legacy issues from when the company started and did not have a fully-functional compliance and legal department.
LendUp facilitated more than 75,000 loans last year, an increase of 110% from 2015. The total lent over the period surpassed $22m, up 225% on the previous year.
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