Loan Aggregators, or Loan Aggravators?
If you’re thinking about applying for an online payday loan, you might be dealing with a direct lender – or you might be dealing with a loan aggregator. A direct lender lends you the money; a loan aggregator is a middleman – a company that collects your personal and financial information on a loan application and shops it around to lenders who might offer you a loan.
Loan aggregators, also called lead generators, sell the information you include on your loan application. They can see, store and sell your name, address, phone number, birth date, Social Security number, bank or credit card account number, and annual income.
That’s right. Some aggregators use keystroke loggers – software that records what you type. So even if you never hit “submit” – even if you fill out the application and then change your mind about applying for the loan – your information may be captured through keystroke logging, and sold or used for dishonest purposes.
Selling personal and financial information is big business, and not everyone who engages in the business is an honest broker. That means just entering your information on the site may come back to haunt you. Some people who buy your information may use it to try to sell you goods and services or charge you for goods and services you didn’t agree to buy. And the FTC says that’s exactly what the company, Ideal Financial Solutions, Inc. did – to the tune of more than $25 million.
The FTC recently charged Ideal Financial Solutions, Inc. with debiting consumers’ bank and credit card accounts without authorization. To cover its tracks, Ideal Financial lied to consumers that complained, telling them that they bought financial management or counseling products at a payday loan website.
And just where did Ideal Financial Solution's, Inc. get consumers’ bank account information? According to the FTC’s complaint, the source is unknown. However, many people who were caught in the web had applied for payday loads online, a process that required them to give their bank account numbers with the understanding that the loan, if approved, would be deposited directly. Unapproved charges are enough to arouse anyone’s ire, but by targeting people already in financial trouble, Ideal Financial’s unauthorized debits allegedly caused many cash-strapped victims to incur pricey penalty and overdraft fees.
The FTC advises you to use caution when sharing personal information online:
- Make sure you know who is getting your personal or financial information.
- Don’t give out personal information on the phone, through the mail or over the Internet unless you’ve initiated the contact or know who you’re dealing with.
- Check your bank statement and credit card bills regularly. Dispute any charges you don’t recognize.
- If a company that claims to have an account with you sends email asking for personal information, don’t click on links in the email. Instead, type the company name into your web browser, go to their site, and contact them through customer service. Or, call the customer service number listed on your account statement. Ask whether the company really sent a request.
- If you see an ad or an offer that looks good to you, take a moment to check out the company behind it. Type the company or product name into your favorite search engine with terms like “review,” “complaint,” or “scam.” If you find bad reviews, you’ll have to decide if the offer is worth the risk. If you can’t find contact information for the company, take your business elsewhere.
- Don’t assume that an ad you see on a reputable site is trustworthy. The fact that a site features an ad for another site doesn’t mean that it endorses the advertised site, or is even familiar with it.
[Note: Edited August 26, 2016, to specify that the Nevada-based company name is Ideal Financial Solutions, Inc.]