A regulator has banned Ejudicate from providing arbitration for financial products because it deceived student loan borrowers about its neutrality and held rigged arbitration proceedings.
“Ejudicate ran bogus arbitration proceedings, deceived borrowers, and hid its financial conflicts of interest,” Consumer Financial Protection Bureau Chief Rohit Chopra said.
In April 2022, Ejudicate, which runs an online dispute resolution platform, started arbitration proceedings against student loan borrowers who allegedly defaulted on loans from Prehired, a company that offered vocational training and "income share" loans that regulators shut down due to its deceptive debt-collection practices, the CFPB said Thursday.
The CFPB said Ejudicate lied about being a neutral arbitrator when it was getting money from Prehired, attempted to bind borrowers with terms in rigged proceedings and started arbitration without consent.
The CFPB also fined Ejudicate only $1 because the company is unable to pay more.