Operators of Payday Loan Scheme Face Industrywide Ban
Two online payday loan operations in the Kansas City area have been shut down after the CFPB and FTC charged them with bilking more than $36 million from consumers.September 17
Online borrowers are often hit with unauthorized charges and subjected to threats of arrests, according to a new report from the Pew Charitable Trusts.October 2
Golden State regulators want to bar Internet lenders from linking electronically to borrowers' bank accounts and instead require them to accept paper checks as repayment. The proposal is a technological step backward, and it could ultimately force many online lenders to pull out of the nation's largest state.April 20
The former operators of an online payday lending scheme in the Kansas City area will be banned from the consumer finance business under a proposed settlement with the Federal Trade Commission.
Timothy A. Coppinger and Frampton "Ted" Rowland III may not participate in any aspect of the consumer lending industry, including collecting payments and selling debts, under an agreement that the FTC announced Tuesday.
The two men were accused last fall of defrauding consumers of more than $18 million over an 11-month period and likely more, because the scheme went on for a longer period of time.
In some instances, companies that the men operated allegedly made weekly withdrawals from the bank accounts of people who never even agreed to take out a payday loan. In cases where consumers did want a loan, the firms misrepresented the cost of borrowing, according to the FTC.
The scheme relied on so-called lead generators, which are websites that solicit information from prospective payday customers, including bank account numbers, and then sell the information.
Under an agreement announced Tuesday, Coppinger faces a monetary judgment of $32.1 million, but that judgment will be suspended if he surrenders certain assets, including undisclosed sums in various bank accounts. Rowland faces a monetary judgment of $21.9 million, which is also subject to suspension.
The settlement orders were approved by the FTC but are still subject to approval by a federal court.