WASHINGTON — The Consumer Financial Protection Bureau has fined a California-based lead aggregator and its owner hundreds of thousands of dollars for allegedly directing consumers toward illegal loans that would be void in their states.
“Zero Parallel steered consumers toward payday and installment loans that were a bad deal,” CFPB Director Richard Cordray said in a press release Wednesday. “We’re ordering Zero Parallel and its owner Davit Gasparyan to pay $350,000 and to stop these illegal abusive practices.”
The company acted as an intermediary between lead generators — which gather data directly from consumers — and payday or installment lenders.
But many of the loans made would have been illegal, and therefore void, in the customer’s home state, the CFPB alleged. Additionally, the agency said, the consumers had no control on the type of lender that would ultimately receive their application.
The CFPB imposed a $100,000 fine on Zero Parallel and asked it to end those practices, which the agency found to be unfair, deceptive or abusive acts.
In addition, the CFPB directly fined Gasparyan over another case involving T3Leads, another lead aggregator he had co-founded.
In 2015 the consumer bureau accused the company of reselling personal data on consumers to lenders and debt collectors, suing its owners over the alleged violations.
Now, the agency is asking Gasparyan to pay $250,000 and stop using lead aggregators to deceive consumers and help originate void loans, in order to settle a separate lawsuit tied to the T3Leads case.