Feeds

FTC sues internet 'loan sharks' for deceptive lending

Accused of'abusive and deceptive' collection tactics

New hybrid storage solutions

Alleged internet payday loan sharks are being sued for failing to disclose loan terms and strong-arm collection tactics by US consumers watchdogs.

The Federal Trade Commission and the State of Nevada have charged 10 related internet payday lenders, many based in the UK but trading in the US, with supplying unethical loans that allegedly breach US federal and state laws.

Websites such as www.cash2day4u.com, one of the defendants, typically offered loans of up to $500 without credit checks or proof of income, the FTC claims. Would-be applicants were only asked for their bank account details and social security numbers.

Applicants were told they would be able to get a loan, typically around $200, within 24 hours but that it had to be repaid by their next payday in addition to usurious fees of between $35 to $80. Failure to repay the loan in full would result in extra fees.

Consumers were allegedly not provided with loan terms, including details of annual percentage rates for loans or late payment fees. After reportedly repaying the defendants many hundreds of dollars more than loan amounts some consumers told their banks not to pay out on any further demands, or closed the affected accounts. This provoked "abusive and deceptive collection calls from the defendants", according to the FTC.

The loans failed to comply with applicable payday lending laws but consumers were falsely told they were legally obliged to repay by the unlicensed lenders. The defendants allegedly threatened consumers with arrest, property seizure or wage packet deductions. The defendants "repeatedly called consumers, coworkers and employers at their workplace, using abusive language and disclosing consumers' purported debts," the FTC complaint states (pdf).

Defendants in the case were named as Cash Today Ltd, The Heathmill Village Ltd, Leads Global Inc, Waterfront Investments Inc, ACH Cash Inc, HBS Services Inc, Lotus Leads Inc, First4Leads Inc, Rovinge International Inc and The Harris Holdings Ltd. The firms ran their business as Cash Today, Route 66 Funding, Global Financial Services International, Interim Cash, and BIG-INT.

Individual defendants in the case were named as Aaron Gershfield, Ivor Gershfield, and Jim Harris.

The defendants are charged with violating the FTC Act through the alleged use of unfair and deceptive collection tactics. They are also charged with breaching the Truth in Lending Act and other statues by failing to supply loan terms to applicants. The FTC lawsuit, filed in Nevada, seeks fines and an injunction against the defendants. ®

Security for virtualized datacentres

More from The Register

next story
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Heavy VPN users are probably pirates, says BBC
And ISPs should nab 'em on our behalf
Former Bitcoin Foundation chair pleads guilty to money-laundering charge
Charlie Shrem plea deal could still get him five YEARS in chokey
NORKS ban Wi-Fi and satellite internet at embassies
Crackdown on tardy diplomatic sysadmins providing accidental unfiltered internet access
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.