On May 22, 2020, the Federal Trade Commission (FTC) announced a charge against a payday lending enterprise for deceptively overcharging consumers millions of dollars and withdrawing money repeatedly from consumers’ bank accounts without their permission. According to the FTC’s press release, the defendants used deceptive marketing tactics through Internet websites and telemarketing to convince consumers that their loans would be repaid in a fixed number of payments, though, the FTC alleges, consumers found that long after the promised number of payments had been made, the defendants had applied their funds to finance charges only and were continuing to make regular finance-charge only withdrawals from their checking accounts. In addition, the FTC charges that the defendants failed to make required loan disclosures, made recurring withdrawals from consumers’ bank accounts without proper authorization, and illegally used remotely created checks.
The FTC press release can be found here.