On February 22, the Federal Trade Commission published a final decision in its investigation and enforcement action against online lender Social Finance, Inc. (“SoFi”).  The action concerned the FTC’s allegation that SoFi made false statements in its advertising regarding the amount student loan borrowers could save by refinancing with SoFi.

According to the FTC, SoFi made “prominent, unqualified” false statements about loan refinancing savings in Internet, television, and direct mail advertisements.  Those ads made representations that borrowers who refinanced could save, for example, $22,359 on average over the lifetime of a loan.  Another stated, “Start saving on your student loans. Average monthly savings $292.”

The FTC argued that SoFi achieved these figures by selectively excluding large categories of consumers in its calculations.  For instance, when SoFi made lifetime savings claims, it did not include those consumers whose loans had a longer term than the previous student loans those consumers refinanced.  Further, SoFi allegedly revealed those excluded categories of borrowers only in fine print buried in contract disclosures.

Under the FTC’s consent order, SoFi agreed to stop advertising about how much money student loan borrowers have saved or will save from refinancing their loans, except where it had reliable supporting evidence.

Troutman Sanders will continue to monitor and report on developments involving the FTC.