Phony Payday Loan Brokers Settle FTC Charges

Phony Payday Loan Brokers Settle FTC Charges
Image: Pixabay
July 14, 2014

The operators of a Tampa, Florida-based payday loan broker scheme have agreed to settle Federal Trade Commission (FTC) charges that they falsely promised to help consumers get loans, but instead used consumers' personal financial data to take money from their bank accounts without their consent.

Claiming to be affiliated with a network of 120 potential payday lenders, defendants Sean C. Mulrooney and Odafe Stephen Ogaga, and five companies they controlled, misrepresented that 80 percent of all applicants got loans within an hour. In reality, the defendants did not lend money to consumers, and there is no evidence that they helped anyone in obtaining a loan.

According to the complaint, the defendants used consumers' personal financial information it had collected through its websites to withdraw $30 from the bank accounts of tens of thousands of consumers, without authorization and without providing anything of value in return.

"These defendants deceived consumers to get their sensitive financial data and used it to take their money," said Jessica Rich, Director of the FTC's Bureau of Consumer Protection. "The FTC will continue putting a stop to these kinds of illegal practices."

The proposed settlement bans the defendants from marketing or providing any credit-related products or services, including loans, prepaid credit cards, debt-relief services, and credit repair services; collecting, selling, or buying consumers' personal and financial information, except in order to process a specifically authorized transaction; and processing transactions using remotely created checks or remotely created payment orders.

The settlement imposes a $6.2 million judgment, which is equal to the defendants' ill-gotten gains. The defendants are also prohibited from misrepresenting the terms and conditions of any service or product they market, and from charging consumers for anything without their consent. The defendants must also dispose of all collected customer information.

In addition to Mulrooney and Ogaga, the complaint named Caprice Marketing LLC; NuVue Partners LLC; Capital Advance LLC; Loan Assistance Company LLC; and ILife Funding, LLC, formerly known as Guaranteed Funding Partners LLC.