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Payday lender scheme stopped
A payday lender who deceptively overcharging consumers millions of dollars and withdrawing money repeatedly from consumers’ bank accounts without their permission has been halted by the Federal Trade Commission. A federal court entered a temporary restraining order halting the operation and freezing the defendants’ assets, at the FTC’s request.
According to the FTC's complaint, the 11 defendants, through Internet websites and telemarketing, and operating under the names Harvest Moon Financial, Gentle Breeze Online, and Green Stream Lending, used deceptive marketing tactics to convince consumers that their loans would be repaid in a fixed number of payments. In fact, in many instances, 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.
- FTC press release