Online Payday Loan Brokers: Adding Insult to Consumer Injury
If you need some fast cash, you may be tempted by ads touting online payday loans. But before you click on a link and share your personal information, I have a cautionary tale to share.
There once was an online payday loan operation that promised to help people find loans. They claimed that they were affiliated with a network of 120 potential payday lenders, and that four out of five people who applied were approved. What’s more, they touted that 80 percent of applicants got loans in as little as one hour.
Lies, I tell you. Lies!
Instead of making loans, the FTC alleges that the operation used the personal financial information they collected from websites — names, Social Security numbers, bank routing numbers, and bank account numbers — to access and debit peoples’ bank accounts without their permission. In all, the bogus loan brokers victimized tens of thousands of people, taking more than $5 million from their bank accounts.
But the FTC, the cop on this beat, has gone to federal court and obtained an order and asset freeze against this Tampa, Florida-based business, which preserves the possibility of providing refunds to consumers. This is the third case involving allegedly fraudulent online payday-loan-related operations, and the first in which the defendants claimed to broker payday loans.