On December 5, 2024, the CFPB took action against student lender Climb Credit and its investors, including 1/0 (“One Zero”), filing a proposed order, which if entered will require the companies to stop making representations in their advertising about the quality of the training programs at their partner schools and graduates’ hiring rates and salaries. Climb Credit, Inc. is a Delaware corporation headquartered in Las Vegas, Nevada that markets private student loans.
The CFPB filed a lawsuit against Climb Credit for providing loans for educational programs that were often not checked for quality and job placement success, or that passed the checks but did not live up to the standards. This was despite Climb Credit claiming the programs were properly vetted. The CFPB’s lawsuit alleges that the defendants violated federal law by:
Deceiving borrowers about its partner schools. The defendants falsely claimed they had vetted partner school programs for job placement and salaries, but often relied on unreliable data and did not actually assess outcomes.
Failing to disclose finance charges and other loan costs. The defendants failed to disclose finance charges and annual percentage rates as required. The CFPB claims that 15,000 consumers received misleading disclosures that excluded origination fees, leading to over $6 million in undisclosed finance charges.
If entered by the court, the order would require Climb Credit and its investors to isclose in all of their consumer-facing marketing materials that consumers should not rely on Climb Credit to identify quality educational schools and programs and pay a $950,000 fine.
Read the CFPB’s press release here.
The complaint and proposed order can be found here.