Consumer complaint received 2025-05-05 00:00:00
Product: Payday loan, title loan, personal loan, or advance loan — Installment loan
Issue: Getting the loan — 
Company: ALCAR INC.
State: SC

Complaint narrative:
CONSUMER COMPLAINT TO THE CONSUMER FINANCIAL PROTECTION BUREAU ( CFPB ) Subject : XXXX XXXX XXXX XXXX Pattern of Algorithmic Discrimination, FCRA Violations, and Facilitated Misconduct via FDIC Partners Submitted by : XXXX XXXX XXXX XXXX XXXX XXXX Entities Involved : XXXX XXXX, XXXX ( XXXX XXXX XXXX XXXX XXXX XXXX XXXX  ( FDIC XXXX XXXX XXXX XXXX XXXX ( FDIC # XXXX XXXX DR Bank ( FDIC # XXXX XXXX This XXXX is supported by : Findings from the XXXX XXXX XXXX independent monitorship on AI discrimination Over 22 directly quoted admissions from XXXX XXXX and XXXX XXXX filings First-hand evidence of personal credit harm from AI misuse, Dark Pattern behavior tactics in email log from upstart customer support and Lead Consumer FDIC XXXX Report data showing systemic profit from harmful XXXX XXXX XXXX XXXX revealing hidden partnerships across multiple platforms I. SUMMARY OF COMPLAINT This complaint alleges a pattern of unlawful conduct by XXXX XXXX XXXX XXXX in partnership with XXXX XXXX XXXX  ( FDIC # XXXX ), XXXX XXXX  ( FDIC # XXXX ), XXXX DR Bank ( FDIC # XXXX ), in violation of the following federal statutes and regulations : Equal Credit Opportunity Act ( ECOA ) 15 U.S.C. 1691, et seq.

Fair Credit Reporting Act ( FCRA ) 15 U.S.C. 1681, et seq.

Unfair, Deceptive, or Abusive Acts or Practices ( UDAAP ) 12 U.S.C. 5531, et seq.

Regulation B 12 C.F.R. Part 1002 Regulation V 12 C.F.R. Part 1022 II. PERSONAL ADVERSE ACTION EXPERIENCE Fraudulent Data Reliance ( 15 U.S.C. 1681s-2 ( b ) ) On 3-17-2025, XXXX : Used TransUnion data actively flagged as fraudulent in CFPB Complaints # XXXX, # XXXX, and # XXXX. XXXX  has three different legal departments listed in the CFPB database.

Issued automated adverse action within seconds citing the below but not limited to : " Lack of sufficient relevant first mortgage account information '' ( Ive resided in company housing overseas of and on for XXXX years ) " Auto loan history '' ( I own a XXXX XXXX XXXX XXXX outright, with no auto loans in XXXX years. ) Violation : Failure to reinvestigate disputed information per FCRA 1681i ( a ) ( 1 ) ( A ).

Algorithmic Discrimination ( 15 U.S.C. 1691 ) Upstarts AI system : Relied exclusively on demonstrably false data points ( auto loans/mortgages ) while ignoring : XXXX year stellar credit profile spread across XXXX bureaus. upstarts AI only viewed the inaccurate/fraudulent data Customer service refused to recognize the same email address used to : Create my Upstart account Receive the {$4000.00} loan denial Obtain adverse action notices ( screenshots attached ) Deceptive Practices ( 12 U.S.C. 5531 ) Account Access Denial : Violates : FTC Act 5 Unfair or deceptive acts or practices ( UDAP ) Precedent : FTC XXXX XXXX, Complaint No. XXXX ( XXXX. XXXX. ) XXXX XXXX : $ XXXX settlement over deceptive customer service practices Legal Inference : Plaintiff was denied basic access to the appeal process and violating statutory rights and preventing due process. 

Regulatory Escalation Obstruction : Lead Counsel for Consumer Litigation XXXX XXXX responded to my internal upstart complaint via email with : " Kiss the mountain air we breathe '' ( automated reply ) " Despite my out of office message, I am working today '' ( manual follow-up ) Demand for Immediate Action Pursuant to 12 U.S.C. 5563, I request the CFPB : Subpoena Upstarts : XXXX approval/denial rates by race/ZIP code AI model variable weightings My case is not isolated, but part of a larger pattern of AI discrimination and regulatory evasion. I am requesting an immediate investigation into upstart and XXXX XXXX XXXX  ( FDIC # XXXX ), Finwise Banks ( FDIC # XXXX ), and DR Banks ( FDIC # XXXX ) due diligence failures under FDIC Part 364 II. Relman Colfax Reports Proof of Bias and Experimental Model : According to public reports from XXXX XXXX XXXX, the independent Civil Rights Law Firm serving as the Fair Lending Monitor for Upstarts lending model, Upstarts platform relies on Machine Learning ( ML ) and Artificial Intelligence ( AI ) to evaluate creditworthiness using non-traditional data, including factors such as educational background. This data set has been widely criticized as reinforcing XXXX and socioeconomic bias. 


In the Final Monitoring Report released on XX/XX/XXXX, XXXX XXXX makes the following points that are critical to this complaint : Upstart 's AI model was not fully vetted or validated for XXXX fairness before XXXX. 

The model used by Upstart ( and, by extension, XXXX XXXX XXXX XXXX XXXX, XXXX DR Bank ) lacks a viable, less discriminatory alternative, raising serious concerns about algorithmic discrimination. 

Despite extended discussions, the Parties remain at an impasse about how to assess the discriminatory impact of Upstarts model.

The Monitor recommends that XXXX apply its methodology to future algorithm changes, indicating the current system is still evolving and experimental. 

Additional findings from the Monitors four-year oversight include : Statistical evidence of bias : XXXX applicants faced statistically significant approval disparities ( Adverse Impact Ratio, or AIR XXXX XXXX ) in every quarter from XXXX. XXXX and XXXX  applicants were also harmed, but XXXX prioritized model performance over corrective action. ( Third Report, p.24 ) Hidden proxies for race : The AI model contains hidden proxy variables such as ZIP code, XXXX XXXX XXXX XXXX ) attendance, and SAT/ACT scores that serve as indirect indicators of race, a clear sign of Educational algorithmic redlining. ( Initial Report, p.21 ) Discriminatory pricing : HBCU/HSI graduates were charged an average of {$3400.00} more than graduates from elite institutions like NYU despite having identical financial profiles. ( Initial Report, p.21 ) Regulatory noncompliance : Upstart ignored the CFPBs No-Action Letter ( NAL ) stipulations , including the requirement to test its algorithm for XXXX bias. They also rejected the Monitors proposed XXXX XXXX, which had been shown to reduce XXXX applicant disparities by 40 %. ( Initial Report, XXXX ) These practices violate : XXXX ( XXXX C.F.R. XXXX ( a ) ) CFPB XXXX XXXX XXXX CFPB No-Action Letter conditions from XXXX Despite being fully aware of these findings, XXXX XXXX Bank XXXX DR Bank XXXX and FinWise Bank XXXX XXXX of which are Federally regulated institutions, failed to conduct an independent audit of the model for bias or compliance with FDICs Part XXXX on identity theft red flags and anti-discrimination safeguards. 

XXXX. ADMISSIONS FROM UPSTARTS SEC FILINGS ( XXXX QUOTES ) * Full list will be sent directly to CFPB XXXX and Ombudsman * Upstarts XXXX ( Year End XXXX ) contains over XXXX direct admissions proving : Known use of inaccurate training data ( upstart yr end XXXX XXXX ) High AI model failure rates and sub-optimally priced loans ( upstart yr end XXXX XXXX ) Investor lawsuits alleging false/misleading disclosures ( upstart yr end XXXX XXXX ) SEC subpoena over AI model use and loan disclosures ( upstart yr end XXXX XXXX, XXXX ) Admission that loans XXXX be XXXX if true lender doctrine is challenged ( upstart yr end XXXX XXXX, XXXX ) XXXX. XXXX BANK COMPLICITY VIA CALL REPORTS FinWise Bank ( FDIC # XXXX ) $ XXXX in loans sold to third parties ( XXXX ) $ XXXX in late fees charged ( XXXX ) Likely acting as a pass-through for Upstart AI-based loans, profiting on high-risk output XXXX XXXX XXXX  ( FDIC # XXXX ) $ XXXX in late fees in XXXX ( XXXX ) Over $ XXXX in gross loans yet only $ XXXX in assets $ XXXX in borrowings with Tier XXXX capital of just $ XXXX Net income = $ XXXX in XXXX signs of instability Website URL listed : Upgrade.com, revealing hidden partner exposure. CEO of XXXX, XXXX XXXX, was the former Co-Founder and former CEO of XXXX. XXXX was fined $ XXXX by the CFPB in XXXX for illegal fees ( XXXX XXXX XXXXXXXX XXXX DR Bank XXXX FDIC # XXXX ) Reported installment loans inconsistent with traditional banking profile Suspected to be a low-volume facilitator for Upstart originations Lacks adequate third-party oversight based on Upstart XXXX references V. DECEPTIVE XXXX PARTNERSHIPS URL EVIDENCE Found in FDIC XXXX Reports ( XBRL tags : XXXX XXXX XXXX XXXX Bank XXXX Upgrade Affirm XXXX XXXX XXXX  XXXX Current XXXX XXXX XXXX : FinWiseBank.com XXXX These domains were listed in FDIC Call Reports as active business channels, yet were not disclosed on XXXX XXXX or XXXX primary public websites, raising : Material omission risks under FTC Act 5 Truth in Lending violations ( TILA Reg Z ) UDAAP violations for lack of true lender clarity VI. LEGAL THEORIES & REGULATORY VIOLATIONS ECOA ( 12 C.F.R. 1002.6 ) Disparate treatment & impact via AI FCRA 607 & 615 Use of inaccurate data, failure to issue proper notices UDAAP ( 12 U.S.C. 5531 ) Deceptive AI branding, false credit offers, no appeal path OCC Bulletin 2021-29 Unsafe or unsound practices in bank-fintech partnerships True Lender Doctrine Loans may be void, investors deceived

Company response to consumer: Closed with explanation