WASHINGTON, D.C. — An online student loan refinancier has reached a settlement with the Federal Trade Commission (FTC) to resolve allegations the company made incorrect statements in print, online and in broadcast media advertisements in an attempt to deceive customers on loan refinancing.
According to the FTC, SoFi has agreed to halt its practice of exaggerated loan refinancing figures, which said students could "save $22,359 on average" with another ad alleging $292 in monthly savings. In some cases, SoFi's ads embellished the average savings and nearly doubled the figures because it left out huge customer categories, the FTC said.
The FTC also alleges the company deceived customers as to when they would have to pay additional money under certain refinancing options. SoFi's actions violate the FTC Act, according to the agency.
“Student loan debt is a huge problem facing students and graduates across the country,” FTC Chairman Joe Simons said in a statement. “Lenders who offer refinancing options must be upfront with students about savings. They cannot make deceptive claims and bury the truth in fine print.”
The FTC's settlement agreement with SoFi also includes the company being prohibited from false claims relating to customers savings when using their products without "reliable evidence," the FTC said. The company could also pay civil penalties.