California-based Loan Factory and its CEO Thuan Nguyen are in hot water over allegedly using competitors’ names, photos and likenesses who had no affiliation with the company to attract business, according to a new class-action lawsuit filed Thursday in a California court. This news was first reported by National Mortgage Professional.
Loan Factory is accused in the lawsuit of using personal and business information of lead plaintiff, Derek Daniel Bobadilla, and other loan originators on its “Find a Loan Officer” page. As a result, this redirected web traffic and business leads to Loan Factory’s website, NMP reported.
However, Bobadilla and other plaintiffs claim in the suit that they have never been affiliated with Loan Factory or provided their information to the lender, and would never give consent for their information to be used on its website. Bobadilla is branch manager of the Bobadilla Finance Team Home Loans in Lake Arrowhead, California.
Represented by Douglas Johnson, managing partner and co-founder of Johnson & Johnson LLP in Beverly Hills, the lawsuit class seeks punitive damages and an award of restitution and disgorgement of profits. The plaintiffs also want a declaration that Loan Factory knowingly misused their names, images and likenesses in direct violation of California’s intellectual property and privacy rights laws.
“Loan Factory has injured Plaintiff and the Class by taking intellectual property without compensation, by unlawfully profiting from its exploitation of personal information via a scheme involving fraud and trickery—holding out the Plaintiff’s and the Class’ names, images, likenesses, and personal information as though such individuals were affiliated with Loan Factory,” according to the complaint.
It continues, “Naturally, Mr. Bobadilla and the Class place great value on their online personas and must control carefully any specific uses of their names, images, likenesses, and personal information because of the economic value of their names, images, likenesses, and personal information to generate leads for loans.”
RISMedia could not reach Nguyen or Johnson for comment by press time. It appears Loan Factory removed the personal information of the mortgage professionals from its website in summer 2023 shortly after the site’s launch, NMP reported.
This isn’t the first time the Loan Factory and its CEO have faced legal troubles.
In 2023, a consent order in North Carolina found that Loan Factory performed unlicensed mortgage originations on at least four different loans. And in 2021, Loan Factory employees filed a class suit alleging that the company failed to pay wages and give required breaks, and violated other California state labor laws.
The Loan Factory, which bills itself as a startup mortgage lender, is licensed to originate mortgages in 48 states and Washington, D.C., and has about 500 loan officers nationwide, according to its website.
