Consumer Payment Card News

PayDay Loan Scum

2011 Rolls Royce GhostIt’s bad enough being forced to get a payday loan to cover a cash shortage and to know you are going to pay through your nose for those urgently needed dollars.

But there are scumsters out there who will falsely promise you a payday loan, debit your bank account to collect a fee without your permission and not deliver anything. There are also scumsters who falsely claim you made a payday loan and then illegally try to scare the living bejesus out of you if you don’t pay up.

A Tampa, Florida-based payday loan broker, claiming to be affiliated with a network of 120 potential payday lenders, promised to help consumers get loans, but instead used consumers’ personal financial data to take money from their bank accounts without their consent. The reality is the firm did not lend money to consumers, and there is no evidence that they helped anyone in obtaining a loan. 

According to the Federal Trade Commission (FTC) the fake Tampa broker used consumers’ personal financial information it had collected through its websites to withdraw $30 from the bank accounts of tens of thousands of consumers, without authorization and without providing anything of value in return.

As a result, the FTC obtained a $6.2 million judgment against the company as well as giving up a 2011 Rolls Royce Ghost, 2007 Lexus LS460, and 2006 Ferrari.

Meanwhile, a Georgia operation used a variety of false threats to bully consumers nationwide into paying supposed payday loan debts. The FTC alleges that many consumers the company contacted had inquired about a payday loan online at one time, and submitted contact information, which later found its way into the defendants’ hands. When the victims did not pay the fake loans they were harassed and intimidated when in fact they didn’t owe any money.

Among the illegal bullying tactics: telling the victims their drivers’ licenses were going to be revoked, and that they were criminals facing imminent arrest and imprisonment. The company falsely claimed to be affiliated with federal and state agents, investigators, members of a government fraud task force, and other law enforcement agencies, and pretended to be a law firm.

The FTC halted the Georgia operation, freezing their assets, pending trial. The company tried to collect $3.5 million in phantom payday loan “debts” that consumers didn’t owe. The FTC hopes the frozen assets can be used to issue refunds to the victims.

BEST ADVICE: PayDay Loans are the “Bottom of Barrel” of Consumer Loans and there are a Few Sharks lurking around. Do some online Research on a Lender before you sign up and don’t be Bullied by a PayDay Loan Collector.

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

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).

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