GreenSky has been fined $ 2.5 million and forced to refund up to $ 9 million in loans the fintech allegedly allowed its merchant partners to take out on behalf of customers who hadn’t authorized the financing, the Consumer Financial Protection Bureau said Monday.
The Atlanta-based company offers technology merchants can use to offer point-of-sale installment loans to consumers that its partner banks essentially fund. GreenSky initially facilitated home improvement loans through such retailers as Home Depot but has since expanded into other areas, including elective surgery.
From 2014 to 2019, GreenSky received more than 6,000 complaints from customers who claimed they had not authorized submitting a loan application, according to the CFPB.
Under its agreement wit the CFPB, GreenSky is now required to obtain evidence of a borrower’s authorization before activating a loan.
CFPB investigators confirmed that in about 1,600 of these cases the merchant was to blame for submitting a loan application without the borrower’s consent. CFPB Acting Director Dave Uejio said in a press release Monday announcing the consent order that GreenSky was “careless” to enable its merchant partners to take advantage of consumers.