Business ProfileforSoFi

On October 29, 2018, the Federal Trade Commission (FTC) entered into a proposed Consent Order with Social Finance (SoFi). File No. 162 3197.

The FTC alleges that since at least April of 2016 the company made false statements about loan refinancing savings in television, print and internet advertisements. The FTC also alleges that the average savings SoFi advertised inflated the actual savings, sometimes even doubling it, by excluding large categories of consumers.

 In addition to the misleading advertising, the FTC alleges that SoFi misrepresented when consumers would actually pay more under certain refinancing plans. Consumers who visited SoFi’s website and were pre-approved for a loan were often directed to a webpage that displayed the loan options for which they prequalified. The FTC alleges that the web page misrepresented the loan options for which consumers would pay more on a monthly basis or over the lifetime of the loan by falsely stating that consumer’s lifetime or monthly savings would be 0.00.

 SoFi, neither admits nor denies any of the allegations. As part of the proposed settlement with the FTC, SoFi is prohibited from misrepresenting to consumers how much money consumers will save or have saved using SoFi’s products and from making any claims about any such savings, unless they are backed up with reliable evidence.

On February 25, 2019, the Federal Trade Commission approved the final Consent Order with SoFi. The Consent Order resolves the allegations that SoFi misrepresented how much money student loan borrowers have saved or will save from refinancing their loans with the company.

Under the final order, among other provisions, SoFi is prohibited from misrepresenting to consumers how much money consumer will save or have saved using its products and from making any claims about any such savings unless the claims are backed up with reliable evidence.