Internet lender pay a cool million to stay in business

We discussed this story back in February. The FTC and state of Nevada were all over a few internet lenders titled “Nevada Internet Lenders Under Fire“. A few days ago, they settled for a cool $1 million. The split was around $30k to the state of Nevada and $970k to the FTC. I guess the FTC is ordering sushi this week.

The Internet payday lenders were accused of violating multiple TILA (Truty in Lending Act) rules, in addition to Nevada’s Deceptive Trade Practices Act.

The lenders are: “Cash Today, Ltd., and The Heathmill Village, Ltd. (both registered in the United Kingdom); The Harris Holdings, Ltd. (registered in Guernsey, an island between England and France); Leads Global, Inc., Waterfront Investments, Inc., ACH Cash, Inc., HBS Services, Inc., Rovinge International, Inc.; and Lotus Leads, Inc., and First4Leads, Inc. (both now dissolved); each doing business as Cash Today, Route 66 Funding, Global Financial Services International, Ltd., Interim Cash, Ltd., and Big-Int, Ltd. The settling individual defendants are Aaron Gershfield and Ivor Gershfield. A separate settlement has been reached with Jim Harris, who managed the Nevada side of the operation.”

Here’s what the Internet lenders need to start doing, in addition to “cough, cough” pony up a $1M.

“The order bars the defendants from violating the Truth in Lending Act and Regulation Z in extending closed-end credit by requiring defendants to make the TILA disclosures mandated by law, and by failing in any other manner to comply with TILA and Regulation Z. The order also requires the defendants to disclose clearly, in writing, in a form consumers can keep and before a transaction is made, the interest rate and other key terms of their loans; a repayment schedule showing dates when consumers’ bank accounts will be debited for the loans; payments and fees for late or non-payment of the loans; and a statement that payday loans may be limited or prohibited in some states. The defendants must obtain consumers’ written confirmation that consumers have received the required disclosures before making a transaction and, when collecting debts, the defendants must provide consumers, upon request, a written statement of amounts and fees paid and due.

In addition, the order prohibits the defendants from violating Nevada state consumer protection law when conducting business from the State of Nevada or when selling goods or services to Nevada residents, including failing to be properly licensed, failing to provide notice and disclosure of all material facts as state law requires, and failing to comply with any state or federal law in selling goods or services. The order also contains recordkeeping and reporting provisions to allow the FTC to monitor compliance.”

So what does this all mean? Being off shore is no longer a safe alternative.

You can read this article in its entirety at Mesquite Local News.

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