A U.S. district court has halted a Tampa, Fla.-based operation that promised to help consumers get payday loans. Instead of loans, the defendants used consumers personal financial information to debit their bank accounts in increments of $30 without their authorization, the FTC alleged.
The FTC alleges that defendants Sean C. Mulrooney and Odafe Stephen Ogaga, nd five companies they controlled, used Web sites with the names Vantage Funding, Ideal Advance, Loan Assistance Company, Palm Loan Advances, Loan Tree Advances, Pacific Advances and Your Loan Funding to collect consumers names, Social Security numbers, bank routing numbers and bank account numbers, which allowed them to access consumers checking accounts.
Claiming to be affiliated with a network of 120 potential payday lenders, the defendants misrepresented that 80% of applicants received loans in as soon as one hour, according to the FTC. The court order freezes the defendants assets to preserve the possibility of providing redress to consumers.
"Repeatedly, weve seen situations where consumers provide sensitive financial information when inquiring about a payday loan online, and that information falls into the wrong hands," said Jessica Rich, director of the FTCs Bureau of Consumer Protection. "The FTC is committed to shutting down these fraudulent operations."
The defendants obtained other consumers financial information by paying more than $500,000 to third parties, and debited those consumers accounts without authorization as well, according to documents filed with the court, according to the FTC.
In all, the defendants victimized tens of thousands of consumers, taking more than $5 million from their bank accounts, the FTC alleges. Consumers who complained to the defendants Philippines-based customer service agents were frequently offered refunds and $100 gasoline vouchers that never materialized, according to the FTC.
Mulrooney and Ogaga apparently used proceeds from their allegedly illegal scheme to finance a lavish lifestyle. Mulrooney is the registered owner of a 2012 Maserati GranTurismo, while Ogaga owns a 2011 Rolls Royce Ghost and a 2006 Ferrari 430, according to documents filed with the court.
This is the FTCs third recent case involving allegedly fraudulent online payday-loan-related operations, and the first one in which the defendants claimed to broker payday loans. In two previous cases, American Credit Crunchers LLC and Broadway Global Master Inc., the defendants allegedly attempted to collect on payday loan debts that either did not exist or werent owed to them.
Along with Mulrooney and Ogaga, the Vantage Funding complaint names Caprice Marketing LLC; Nuvue Partners LLC; Capital Advance LLC; Loan Assistance Company LLC; and Ilife Funding, LLC, formerly known as Guaranteed Funding Partners LLC.