FRAUDBATCH W12FINTECH / LENDING
LendUp
CFPB shut LendUp down for repeatedly deceiving sub-prime borrowers. Permanent loan ban. ~$361M wiped.
$361M
Capital Raised
10 YRS
Lifespan
118,101 consumers misled · $40.5M consumer redress
Body Count
AUTOPSY REPORT
Pitched as the ethical alternative to payday lenders, with a 'LendUp Ladder' that promised lower future interest rates for on-time payment. CFPB sued in September 2021, alleging LendUp violated a prior 2016 order, made false claims about the rate-reduction ladder, and broke the Military Lending Act protecting active-duty service members . Settled December 2021. Permanently barred from making new loans. 118,101 consumers misled. Backed by Google Ventures, PayPal, QED, and Alexis Ohanian.
DAMAGE: 118,101 consumers misled · $40.5M consumer redress
TIMELINE
2012Founded, joins YC W12
2016First CFPB enforcement action — $3.6M settlement
2021-09CFPB files second federal suit alleging repeat violations
2021-12Settlement: permanent loan ban, $40.5M consumer redress
2022Wind-down complete
Satirical project. Not affiliated with Y Combinator. All information from public records.