Online lending start-up LendUp, which has billed itself as a better and more affordable alternative to traditional payday lenders, will pay $6.3 million in refunds and penalties after regulators uncovered widespread rule-breaking at the company.

The California Department of Business Oversight, which oversees lenders doing business in California, and the federal Consumer Financial Protection Bureau said Tuesday that LendUp charged illegal fees, miscalculated interest rates and failed to report information to credit bureaus despite promising to do so.

LendUp, based in San Francisco, will pay refunds of about $3.5 million -- including $1.6 million to California customers -- plus fines and penalties to the Department of Business Oversight and CFPB.

The regulatory action is a black eye for LendUp, which has held itself up as a more reputable player in an industry notorious for taking advantage of desperate, cash-strapped consumers. On its website, the company says access to credit is a basic right and it promises "to make our products as easy to understand as possible."

LendUp is backed by some of the biggest names in Silicon Valley, including venture capital firms Andreessen Horowitz and Kleiner Perkins Caufield & Byers, as well as GV, the venture capital arm of Google Inc. This summer, it raised $47.5 million from GV and other investors to roll out a credit card aimed at consumers with bad credit.

But regulators said the company, originally called Flurish, made several big, basic mistakes, such as failing to properly calculate the interest rates disclosed to customers and advertising loans to customers who lived in states where those loans were not available.

"LendUp pitched itself as a consumer-friendly, tech-savvy alternative to traditional payday loans, but it did not pay enough attention to the consumer financial laws," CFPB Director Richard Cordray said in a statement announcing the enforcement action.

Regulators reviewed LendUp's practices between 2012, the year the company was founded, and 2014. In a statement, Chief Executive Sasha Orloff said the company's youth played a role.

"These regulatory actions address legacy issues that mostly date back to our early days as a company, when we were a seed-stage startup with limited resources and as few as five employees," Orloff said. "In those days we didn't have a fully built out compliance department. We should have."

Though a "move fast, make mistakes" ethos is common in Silicon Valley, it's not looked kindly upon by regulators. Cordray, in his statement, said youth is not an excuse.

"Start-ups are just like established companies in that they must treat consumers fairly and comply with the law," he said.

Along with overcharging customers because of miscalculated interest and illegal fees, LendUp also misled borrowers about how the company's loans could help improve their credit scores and lead to lower-rate loans in the future, the CFPB said.

The regulator found that LendUp promised to report information to credit bureaus, but only started doing so in 2014, more than a year after the company started making loans.

What's more, the CFPB said LendUp's advertising was misleading, claiming that repeat borrowers could get larger, lower-rate loans. Between 2012 and 2015, the company made that claim nationwide, even though the lower-rate loans were available only to customers in California.

LendUp has grown quickly over the last few years, issuing $22.3 million in loans in California last year, more than doubling 2014's figure.

The company makes online payday loans -- up to $250, paid back with a single payment after no more than a month -- with rates that can top 600%, as well as larger loans of up to $500 that carry lower rates and are paid back over a few months.