A proposed class action filed in the state of Arizona accuses Figure Lending, now
The litigation filed by Lee Ward, a former Figure customer, claims the fintech lender offers Home Equity Line of Credit (HELOC) loans that are actually home equity loans with higher interest rates. It also questions whether Figure's technology improves the borrower experience, or whether it is used to further the alleged scheme.
"Figure's marketing materials, website, and training are all geared toward misleading customers into thinking that they will be receiving a HELOC from Figure, when in fact Figure is not willing to extend them only a portion of the approved amount," the suit reads. "Figure funds the entire approved amount and thereby makes far more in fees and interest than it would from a real HELOC."
Prior to being filed in an Arizona federal court June 6, the suit bounced around in a number of jurisdictions. Figure moved to dismiss the case in both Georgia where it was originally filed in December 2022 and in Arizona where it was transferred to. The suit was first reported by Law360.
The suit relies on dozens of customer reviews illustrating Figure's alleged wrongdoing gathered from sites like Better Business Bureau, Trustpilot.com, those filed with the Consumer Financial Protection Bureau, as well as on Ward's own experience.
Some of these experiences, ranging from 2019 to 2022, outline instances in which customers would be filing out an application for a HELOC loan when a glitch or disruption would take place. As a result, borrowers would have to restart their applications, but this time with notably higher interest rates.
Other reviews note the company misrepresents in its initial advertising of low rates, with customers getting offered a HELOC with rates almost triple that of what is advertised. They also highlight issues of fully repaying the loan once it was originated.
As of 2024, the same practices are taking place, the suit claims.
Figure declined to comment.
Ward's own experience alleges that when he applied for a HELOC with Figure in the fall of 2019 he was told his interest rate would be "far below the rate that he was ultimately charged, namely 9.75%."
Additionally, the plaintiff claims the HELOC product he applied for was misrepresented and was in fact a home equity loan. The fintech lender funded the entire approved amount instead of a portion, thereby allegedly making far more fees and interest than it would from a real HELOC product, the suit said.
Misrepresenting their loan product allows the fintech lender to avoid regulatory scrutiny and liability, Ward claims.
An additional complaint from the plaintiff – one echoed by some of the reviews – is that the experience of paying off Figure was problematic.
After Ward decided to sell his home and pay Figure back in full, the company allegedly used
"an improper formula to assess excessive amounts of interest and 'deferred interest' in order to provide clearance for Mr. Ward to sell his home. Figure also charged a "recording fee" although Mr. Ward's closing firm handled the recording of all of the transaction documents," Ward claims.
The plaintiff is seeking for the U.S. District Court Western District of North Carolina Charlotte division to certify the matter as a class action and for restitution in an undisclosed amount.
As of February 2024, Figure has originated more than $9 billion worth of loans, with over 100,000 customers using its services, according to its website.
The suit comes in the midst of
