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Mysterious Bank Deposit

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Truth in Lending Act PayDay LoanYou wake up one morning and check your bank account and you discover there is a $200 or $300 deposit made to your account that you have no idea in God’s Green Earth where it came from.

Then shortly thereafter you notice a withdrawal from your account every other week of up to $90 for finance charges.

It’s a new twist on fake payday loans.

A Missouri online payday loan company allegedly bilked consumers out of tens of millions of dollars by trapping them into loans they never authorized and then using the supposed “loans” as a pretext to take money from their bank accounts.
Over one eleven-month period between 2012 and 2013, the alleged scamsters issued $28 million in payday “loans” to consumers, and, in return, extracted more than $46.5 million from their bank accounts. The firm has been shut down.

The Federal Trade Commission (FTC) said the operation used personal financial information bought from third-party lead generators or data brokers to make unauthorized deposits of between $200 and $300 into consumers’ bank accounts. Often, the scheme targeted consumers who had previously submitted their personal financial information – including their bank account numbers – to a website that offered payday loans.

After depositing money into consumers’ accounts without their permission, the defendants withdrew bi-weekly reoccurring “finance charges” of up to $90, without any of the payments going toward reducing the loan’s principal, the FTC alleged. The scoundrels then contacted the consumer by phone and email, telling them that they had agreed to, and were obligated to pay for, the “loan” they never requested and misrepresented the true costs of the purported loans. In doing so, the agency alleged, they often provided consumers with fake applications, electronic transfer authorizations, or other loan documents purporting to show the consumers had authorized the loan.

In many instances, if consumers closed their bank accounts to make the unauthorized debits stop, the defendants sold the supposed “loan” to debt buyers who then harassed consumers for payment, the FTC contends.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.

Also, stay on top of the latest scams with CardTrak’s #SCAMTRAK.

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