Internet payday lenders received a setback recently. The FTC and the state are seeking to permanently bar 7 US companies (and 4 other British companies were named in the order) from “future violations”, whatever that means; and return any money made while allegedly using illegal collection tactics. Sound pretty vague, if you ask me.
Last November, I published a post title Nevada trying to cut down on Internet payday loans. Apparently, the commissioner of the Department of Regulation in Nevada did not want to deal with out of state claims, made about Internet lenders operating in Nevada. It looks like someone paid attention.
Among other things, the internet lenders are being accused of:
“Violating the law by using unfair and deceptive collection tactics, including falsely threatening consumers with arrest or imprisonment, falsely claiming that consumers are legally obligated to pay the debts, threatening to take legal action they cannot take, repeatedly calling consumers at work and using abusive and profane language; and disclosing consumers’ purported debts to co-workers, employers and other third parties. They also allegedly violated the U.S. Truth in Lending Act and federal Regulation Z by failing to make required written disclosures about key terms including the amount financed, itemization of the amount financed, the finance charge, the annual percentage rate, the payment schedule, the total number of payments and any late payment fees.”
Personally, I’m a little surprised that this has reached the federal level. It seems that Internet Lenders based in the US are being targeted by the state and federal authorities. Just last we, a lender settled with the state of Wisconsin in a post titled Internet Lender hit with $60k class action suit.
Attorney’s for the 7 lenders are working to resolve the complaint. They plan on filing a response to the complaint by March 1st.
One thing for sure is that they’re not stopping just at the lenders. They’ve got their sights on the lead generators also.
