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TDNO Letter to U.S. CFPB Ombudsman and Whistleblower program.

Predatory Loans: Consumer Financial Protection Bureau Ombudsman and Whistleblower decision on whether the experience of complainants constitutes Predatory Lending Practices.

TO: Consumer Financial Protection Bureau, Ombudsman. Whistleblower

Subject: Predatory lending practices

Complainant is a client of The Dark Night Online,

my Financial Investigation Agency.

Complainant is a victim of predatory lending practices by financial institutions using unsecured high-risk loans.

Complainant was defrauded of more than USD $400,000 by a criminal who is well-versed in coercing and coaching victims into obtaining unsecured loans and then scamming them of these funds. There is a mass epidemic of victims of predatory and unsafe lending practices who are victims of fraud.

My client and I want the attention of the Consumer Financial Protection Bureau on this crisis of unsafe lending practices being used to further victimize individuals who are victims of financial crimes. We hope lending practices fall in the purview of the CFPB, and there will be an investigation into Complainant's situation to determine if Complainant's case constitutes consumer abuse. Victims like Complainant are directed into taking loans from lending platforms, forced to tap into investments and retirement funds, and then scammed by using these funds for cryptocurrency-related crimes.

Overview of what happened to Complainant:

  • Victim of a complex romance scam by an organized criminal network

  • Defrauded through a fake cryptocurrency trading platform.

  • Lost all their life savings, financial investments, and retirement funds.

  • Under duress, manipulated and coerced to apply for home improvement loans.

Predatory consumer loans:

  • Despite earning only USD $60,000 gross, Complainant was enabled to take out two large, mortgage-level, unsecured, high-interest, high-risk consumer loans through an unsafe and predatory risk evaluation process and underwriting.

  • SoFi USD $70,000

  • Upgrade USD $30,000

  • Home Improvement loans are given to victims who are under duress, despite not owning a home to improve.

  • Risk Evaluation process only checks their credit score with no other underwriting.

  • Risk Evaluation did not verify the purpose of the loan.

Complainant's circumstance:

  • Extorted, forced to borrow money to pay a "Tax" to access their frozen funds held by the criminal enterprise.

  • Loans for Cryptocurrency Trading under manipulation, coercion, and duress

  • Groomed by the organized criminals.

  • Criminals understood the credit process and weaknesses in credit evaluation to access Home Improvement loans.

  • Complainant does not own a home.

Predatory Lending:

Unsafe and aggressive lending tactics downplay the high cost and high risk of mortgage-level loans. Clever marketing gimmicks relabel these large loans as easy to obtain but do not highlight the affordability and risk to the individual. Consequently, consumers are left burdened with high-interest and large payments, living paycheck to paycheck, and sometimes borrowing even more to survive the debt. Further, as a result, the victims of predatory lending are unable to maintain their living standards under the weight of massive debt. Therefore, these high-risk loans with minimal underwriting are predatory and damaging to the individual.

Complainant is a victim of unsafe underwriting criteria that does not protect the consumer. SoFi and Upgrade may have failed in their burden of care and duty to adequately assess the risk to their consumers. SoFi lent a substantial, high-interest, unsecured loan for home improvements to a person who does not own a home to improve. Upgrade also awarded an unsecured loan for home improvements.

It is clear that the risk assessment, verification, underwriting criteria, and barrier to entry were deficient. According to complainant, SoFi and Upgrade made little to no effort to validate the loan purpose and granted the loan based on their high credit score. Neither of these lending institutions attempted to assess if the loan was being taken out under duress.

There are provisions and precedents in law for elderly and spousal loans made under duress. Similarly, a relationship has been formed in a complex fraud that has occurred through a romance scam, and trust is elicited through elaborate deception. This parallels the conditions of the elderly and spousal coercion.

I would appreciate the CFPB's review of this case, as complainant is a victim of unsafe consumer lending practice by SoFi and Upgrade.




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