In the wake of a payday lending scam that swindled money from consumers, the Federal Trade Commission is sending checks to consumers affected by the ruse.
The FTC said on its website on Wednesday (Feb. 17) that it was mailing checks to the victims, who had fallen prey to promises that they could get payday loans, yet were debited though their bank accounts, in $30 amounts, without having authorized that banking activity.
As has been reported, in July 2014, a federal court halted payday loans and operations conducted by a number of individuals and entities, including Ideal Advance, Loan Assistance Company, Loan Tree Advances, Your Loan Funding, Sean C. Mulrooney, Odafe Stephen Ogaga, Palm Loan Advances and Pacific Advances.
Back in 2013, the FTC said the Tampa-based firms and people used the Internet to snare consumers who gave up valuable personal data — of course, opening the door to fraudulent activity.
The personal data was gleaned from borrowers online, as the firms and people named above claimed, according to The Wall Street Journal, to have networks stretching across 120 lenders. Though promising loans of a much as $1,000 with a turnaround time of as fast as an hour, the network took sensitive consumer data, such as bank information and Social Security numbers, to begin siphoning cash from users’ accounts. In the end, the FTC alleged, the total fraud topped $5 million, with tens of thousands of victims.
The size and scope of the $30 repayment plan announced on Wednesday were not immediately disclosed by the FTC, but repayments and restitution in that case are now official. The FTC has also sought permanent injunctions against those payday outfits and individuals.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More