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The operators of LendEDU agreed in a proposed settlement with the Federal Trade Commission to stop misleading consumers into believing their website contains objective information about student loans and other financial products. The Delaware-based company would also pay $350,000 under the proposed settlement released Monday.
The FTC in a complaint had alleged that LendEDU’s operators -- Nathaniel Matherson, Matthew Lenhard and Alexander Coleman -- falsely claimed that the website provided “objective,” “accurate” and “unbiased” information about consumer financial products, such as student loans, personal loans and credit cards. “But in fact LendEDU sold its rankings to the highest bidder,” Andrew Smith, director of the Bureau of Consumer Protection, said in a news release. “These misrepresentations undermine consumer trust, and we will hold lead generators like LendEDU accountable for their false promises of objectivity.”
The FTC also alleged LendEDU led consumers to believe that consumer reviews on its website and third-party sites reflected the actual experience of impartial people. But among those writing the reviews were LendEDU employees, their family and friends, the FTC alleged.
In 2018, Matherson acknowledged LendEDU’s sister company, Student Loan Report, made up a fake self-described journalist, Drew Cloud, who pitched reporters stories and was quoted often in articles about student debt. Cloud wasn’t mentioned in the FTC complaint.
