MONEYLION LAWSUIT ALLEGES COMPANY TARGETED AND OVERCHARGED MILITARY
By Olivia Rigby
Online banking has become a common commodity for many people in the last few years. While it can be a great thing for many, it can also be a hidden trap for others. MoneyLion Technologies, a popular online banking resource, is currently facing a lawsuit. This MoneyLion lawsuit is based on accusations that MoneyLion is overcharging their members, particularly those who are in the military and their families. Read more to find out why the Consumer Financial Protection Bureau filed this lawsuit.
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Background on the MoneyLion LawsuitFirst, what is MoneyLion? According to their website, MoneyLion is an “all-in-one mobile banking experience.” They offer a wide variety of services from banking to investing to Instacash. Though MoneyLion Technologies as a whole is technically not a bank, they are an online financial technology company. You can connect your other bank accounts to MoneyLion, but they also offer their own banking as part of their services. The MoneyLion bank is called “RoarMoney,” and it’s sponsored by MetaBank. Their claim to fame is that they’re advocates for those who have been ignored or taken advantage of by other banks. On the surface, MoneyLion bank can seem like a great online banking company, but with this recent MoneyLion lawsuit, many are asking… Is it really? The lawsuit against them revolves around their loan system and their MoneyLion Plus membership.
How Does MoneyLion Work?MoneyLion is mostly a free (or almost free) service; their RoarMoney charges only $1/month, and their Managed Investment accounts can charge $1-$5 a month, depending on the account type. The problems with MoneyLion, however, will usually come up with their MoneyLion Plus subscription services and its fees. There are great benefits to having a Plus account, but with the extra fees, it might not be worth it for many.
What MoneyLion Plus OffersThere are a lot of great services with a MoneyLion Plus membership, but these pros may also lead to many cons. Below is a list of what MoneyLion Plus offers. Ironically, it’s some of these benefits that are the reasons for the MoneyLion lawsuit.
Low-Interest Loans:MoneyLion Plus offers low-interest loans. MoneyLion will track your money spending habits and see if you qualify for a low-interest MoneyLion loan.
Managed Investment Account:MoneyLion Plus offers a managed investment account. This sounds great on the surface; you can invest, but you don’t have the stress of figuring it out on your own. However, this means that each month, MoneyLion can withdraw $79 from your account. $50 of that goes towards your investment account, and the rest is your monthly membership fee.
Top Reasons for the MoneyLion LawsuitThe MoneyLion loan system and their MoneyLion Plus fees are the main reasons for this recent lawsuit. As stated, MoneyLion claims to be the bank/lender for all; they will offer opportunities to someone who was previously denied them elsewhere. This can sound very promising for many, especially for military families wanting a loan but being denied by other banks. You can read the full 30-page complaint filed by the Consumer Financial Protection Bureau (CFPB) against MoneyLion here, but to sum it up, MoneyLion is being accused of:
Overcharging military members and their families:In order to gain access to certain MoneyLion loans, a MoneyLion Plus membership is required. With the membership fees and loan interest charges combined, this surpassed the 36% interest rate cap that has been set by the Military Lending Act. Because of this, the loans were voided, but MoneyLion still claimed that military members/families who used their services owed them money.
Refusing to cancel memberships:It’s not as simple as knowing how to delete MoneyLion accounts. MoneyLion led their MoneyLion Plus members to believe that they could cancel their memberships at any time, but the truth is that they could not. MoneyLion users cannot cancel their memberships if they have outstanding fees, such as loan payments or unpaid membership fees.
See also:How To Get Out of Debt: 5 Expert Tips To Get Veterans Back on Track
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