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FTC official: LendingClub opted not to settle Federal Trade Commission lawsuit

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FTC official: LendingClub opted not to settle Federal Trade Commission lawsuit

LendingClub Corp. did not settle the Federal Trade Commission lawsuit against it, and the case will go to court, an FTC official said.

The agency sued LendingClub in April for promoting loans with "no hidden fees" when LendingClub allegedly did charge up-front hidden fees on the products. According to the regulator, an internal review by LendingClub flagged its claims about the products and said they could be viewed as "deceptive" and misleading to consumers.

"LendingClub didn't settle," Andrew Smith, director of consumer protection at the FTC, said Sept. 6 at the Electronic Transactions Association's fintech policy forum. "Courts will decide through the crucible of litigation whether we're right or not."

The digital lender is also facing a class action lawsuit over the allegedly misleading or false statements. The company described that claim as "meritless" when previously reached for comment.

When reached for comment, a LendingClub spokesperson said the company filed a motion to dismiss the case in June that the court has not yet heard.