Following legal challenges and enforcement actions from attorneys general in multiple states, EasyKnock has announced its decision to cease operations approximately two weeks after being sued by Connecticut’s Attorney General.
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Sale-leaseback platform EasyKnock, which had been facing consumer lawsuits and enforcement actions by attorneys general in several states, has made the decision to shut down, as announced by the company on Thursday.
“After many years of assisting consumers, EasyKnock has made the difficult decision to cease operations,” a statement on the company’s website informed visitors. “We are grateful for the trust placed in us to be a part of the financial journey of so many. While EasyKnock may no longer be in operation, arrangements have been made to ensure continued services for our customers.”
The news was originally reported by NPR, which published an in-depth investigative article on the New York-based sale-leaseback platform’s business practices in June.
NPR highlighted consumer lawsuits against EasyKnock in Texas, Maryland, South Carolina, Pennsylvania, and Ohio, as well as enforcement actions by attorneys general in Michigan and Massachusetts.
In September, EasyKnock won a case in Texas where an arbitrator ruled against a Texas couple who claimed that their transaction was essentially a disguised loan, awarding the company $153,000.
However, last month, the Connecticut Attorney General’s Office filed a lawsuit against EasyKnock, alleging that the company specifically targets cash-strapped homeowners who may not qualify for traditional financing due to poor credit or excessive debt.
The complaint filed on Nov. 27 detailed instances where cash proceeds were reportedly significantly less than the consumer’s total home equity and accused EasyKnock of engaging in illegal landlord practices. The lawsuit sought to prevent the company from operating in Connecticut, as well as seeking restitution and civil penalties.
Inman has reached out to EasyKnock for comment.
Established in 2016 and headquartered in New York City, EasyKnock closed a $3.5 million seed funding round in 2018, which included $100 million in new debt funding from investors such as Montage Ventures, Crestar Partners, and Blumberg Capital.
This initial funding round was followed by a $12 million Series A in 2019, which also secured $203 million in debt funding, as well as a $20 million Series B in the summer of 2020. Most recently, EasyKnock announced a $57.2 million Series C funding round from both new and existing investors, including Blumberg Capital, Gaingels, Moderne Ventures, QED Investors, Viola FinTech, and Zillow co-founder Spencer Rascoff.
Editor’s note: Inman’s Taylor Anderson contributed to this story.
Email Matt Carter
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