The comparison website, launched in 2014 and based in Hoboken, New Jersey, also posted supposedly impartial reviews from consumers that were actually written or made up by LendEDU employees, their family and friends, or other people with personal or professional relationships with the company, according to the FTC.
The firm — as well as chief executive Nathaniel Matherson, chief technology officer Matthew Lenhard and Alexander Coleman, vice president of product — agreed to settle the allegations for $350,000.The public has 30 days to comment on the settlement before the regulator decides to finalize it.
"Contrary to their claims, respondents have provided financial services companies with higher numerical rankings or star ratings and higher positions on rate tables based on compensation," the regulator claimed. "Respondents also have added or removed companies from their content based on compensation."
LendEDU also, in several instances, required partner companies to increase payments to maintain their current rankings.In one anonymous example, LendEDU CEO Matherson asked one student loan refinance company to pay $9.50 per click to retake the No. 1 ranking after it had fallen to No. 3. LendEDU officials later asked the same firm to up payments to $16 per click to maintain its position, and the firm agreed to pay $15.