Court halts Internet lending practices

A U.S. District Court orders seven Internet lending operations to cease some of their practices.

A U.S. District Court has ordered seven Internet-based lending operations to halt some of their practices after the U.S. Federal Trade Commission and the state of Nevada complained that the companies failed to disclose key loan terms and used abusive collection tactics.

The companies charged in the complaint by the FTC and Nevada were accused of threatening customers with arrest if they did not repay loans, repeatedly calling customers at work, using profane language, and telling customers' coworkers and bosses of their loan status.

The seven related payday loan companies and their owner have agreed to the court order, announced Monday, pending a trial in which the FTC and Nevada are seeking to permanently bar the companies from future loan violations.

The companies, including Leads Global, Waterfront Investments and ACH Cash, offered loans of US$500 or less within 24 hours of application without requiring a credit check, proof of income or documentation, the FTC said. Also named in the order from the U.S. District Court for the District of Nevada was owner Jim Harris.

The companies told customers that they qualified for a loan that had to be repaid by their next payday with a fee ranging from $35 to $80, and that if the loan was not repaid by then, it would be extended automatically for an extra fee that would be debited from the consumer's bank account "until the loan is repaid," the FTC said.

The FTC charged the companies with unfair and deceptive collection tactics.

They also allegedly violated the Truth in Lending Act and Regulation Z of the U.S. Federal Reserve Board by failing to make required written disclosures, clearly and conspicuously, before consummating a consumer credit transaction, including finance charges, annual percentage rates and late payment fees, the FTC said.

The court order bars the companies and Harris from deceptive debt-collection practices such as misrepresenting that consumers can be imprisoned for failing to pay debts and that for nonpayment consumers may or will be subject to legal action, such as seizure of property or garnishment of wages. The preliminary injunction also prohibits unfair collection practices such as continuously and repeatedly calling consumers and third parties at consumers' workplaces, using obscene or threatening language toward consumers and third parties, and disclosing the existence of consumers' purported debts to third parties.

The injunction also bars the lending companies and Harris from disclosing or benefitting from customers' personally identifiable or financial information.

Also charged in the FTC's November complaint but not named in the order are four U.K.-based companies operating in the U.S. as Cash Today, Route 66 Funding, Global Financial Services International and Interim Cash, as well as their owners.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags ISP

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

Father’s Day Gift Guide

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?