Internet lenders to pay $1 million to settle complaint

The payday lenders falsely threatened customers with arrest, the FTC said

A group of Internet payday lending companies that allegedly threatened customers who didn't make payments with arrest and called customers at work and swore at them has agreed to pay US$1 million to settle charges from the U.S. Federal Trade Commission and the state of Nevada.

The FTC, in a November complaint in U.S. District Court for the District of Nevada, charged the companies with using unfair and deceptive collection tactics.

The companies told consumers that the loans had to be repaid by their next payday with a fee ranging from US$35 to $80, or the loans would be extended automatically for an extra fee debited from consumers' bank accounts until the loans were repaid, the FTC said.

Some customers voicing complaints on Internet sites have reported being charged hundreds of dollars in late fees for a small loan.

The payday loan companies falsely threatened consumers with arrest, falsely claimed that consumers were legally obligated to pay the debts, threatened to take legal action they could not take, repeatedly called consumers at work using abusive and profane language, and improperly disclosed consumers' purported debts to third parties, the FTC said Monday.

The companies also allegedly failed to make required written disclosures to consumers, such as the amount financed, the annual percentage rate, payment schedule, total number of payments, and any late payment fees, in violation of the U.S. Truth in Lending Act, the FTC said.

The settlement order, approved last week, requires the defendants to pay $970,125 to the FTC and $29,875 to the state of Nevada.

The order prohibits them from falsely claiming that consumers may be arrested or imprisoned for failing to pay debts, that they are legally obligated to pay the full amount of a purported debt, and that for nonpayment they are subject to lawsuit, seizure of property, or garnishment of wages.

The defendants also are barred from repeatedly calling consumers' work places, using obscene or threatening language toward consumers and third parties, and disclosing the existence of consumers' purported debts to third parties.

The order also includes provisions relating to alleged violations of Nevada law.

The order prohibits the defendants from violating Nevada state consumer protection law when conducting business from the state 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, and failing to comply with any state or federal law in selling goods or services.

The settling corporate defendants are Cash Today and The Heathmill Village, both registered in the U.K.; The Harris Holdings, registered in Guernsey; Leads Global. Waterfront Investments, ACH Cash, HBS Services, Rovinge International, and two dissolved companies. Each were doing business as Cash Today, Route 66 Funding, Global Financial Services International, Interim Cash, and Big-Int.

The settling individual defendants are Aaron Gershfield and Ivor Gershfield. A phone call Monday to Route 66 Funding went unanswered.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags USA governmentlegallawsuitsinternet

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Cool Tech

Xiro Drone Xplorer V -3 Axis Gimbal & 1080p Full HD 14MP Camera

Learn more >

ASUS ROG Swift PG279Q – Reign beyond virtual world

Learn more >

D-Link TAIPAN AC3200 Ultra Wi-Fi Modem Router (DSL-4320L)

Learn more >

Crucial® BX200 SATA 2.5” 7mm (with 9.5mm adapter) Internal Solid State Drive

Learn more >

D-Link PowerLine AV2 2000 Gigabit Network Kit

Learn more >

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Gadgets & Things


Learn more >

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Lexar Professional 2000x SDHC™/SDXC™ UHS-II cards

Learn more >

Family Friendly

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Lexar Professional 2000x SDHC™/SDXC™ UHS-II cards

Learn more >

ASUS VivoPC VM62 - Incredibly Powerful, Unbelievably Small

Learn more >

Stocking Stuffer

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Lexar Professional 2000x SDHC™/SDXC™ UHS-II cards

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Best Deals on Good Gear Guide

Latest News Articles


GGG Evaluation Team

Kathy Cassidy


First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni


For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell


The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi


The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott


My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.


Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?