A finance website founded by former University of Delaware students has agreed to pay $350,000 to settle charges that it posted fake reviews and steered customers toward firms that spent the site, in accordance with federal regulators.
The Federal Trade Commission Monday declared a proposed consent settlement with LendEDU.com and chief operators Nathaniel Matherson, and Alexander Coleman.
The consent settlement will be subject to public comment for a month after publication in the Federal Register, after which the commission will resolve whether to make the intended consent order final.
Based on the FTC’s administrative complaint, the operators of LendEDU.com claimed that the website offered “goal,” “accurate,” and “unbiased” details about consumer financial products, such as student loans, private loans, and credit cards.
However, LendEDU didn’t disclose that information on its website was influenced by payment from advertisers, authorities stated.
Based on the grievance, the company pointed customers toward lenders and creditors that paid to influence its website content, including product rankings and ratings.
The company further posted false flattering critiques by its website. On third-party websites that had been written by employees, friends, or other associates of LendEDU, officers stated.
The website is run by ShopTutors, an organization that Matherson and Lenhard launched in 2014, while students at the University of Delaware to attach students with tutors. The corporate won the school’s annual business startup funding competition and eventually reworked into LendEDU, which is stationed in New Jersey.
In website postings last week, LendEDU executives noted that the company is compensated by some of the financial services firms listed on its webistes.