September 22, 2014
The FTC has shutdown a Missouri-based scam operation, which claimed to be a payday lending business. The scam operated by depositing $200-300 into consumers’ bank accounts without their permission, then repeatedly withdrawing money from the same account as “finance charges”, using fake documents presented to consumers’ banks. The FTC press release is here and the court’s order shutting down the scam is here.
A network of companies, controlled by two individuals in Missouri, “bought consumers’ personal information, made unauthorized payday loans, and then helped themselves to consumers’ bank accounts without their authorization… Over one eleven-month period between 2012 and 2013, the defendants issued $28 million in payday ‘loans’ to consumers, and, in return, extracted more than $46.5 million from their bank accounts, the FTC alleged.” Says the FTC. These “loans” were not authorized or requested by the scam’s victims, yet if challenged by a consumer, the companies would claim that their victims were obliged to pay their bogus “finance charges” on the unauthorized loans.
A complete list of the companies involved in the scam can be found in the FTC press release linked above.