Judge Agrees With FTC: Scammers Debited Payday Loan Applicants’ Bank Accounts Without Their Consent; Consumers Entitled to More Than $9.5 Million in Refunds

A federal judge has found in favor of the Federal Trade Commission in its case against an online operation that illegally debited consumers’ bank accounts when they visited the defendants’ websites seeking payday loans.  The FTC will seek a court order requiring the defendants to return more than $9.5 million to consumers.

In 2011, the FTC charged Direct Benefits Group LLC, Voice Net Global LLC, Solid Core Solutions Inc., WKMS Inc., Kyle Wood, and Mark Berry with illegally debiting consumers’ bank accounts and failing to disclose that they would use their bank account information to charge them for enrollment in unwanted programs and services.  The court froze the defendants’ assets pending resolution of the case.

In a decision announced today, U.S. District Court Judge John Antoon II found that the FTC proved its case, that a permanent injunction to stop the illegal practices is warranted, and that consumers are entitled to the return of more than $9.5 million.

According to the FTC’s complaint,the defendants’ websites asked for consumers’ personal and financial information, and, near the end of the loan application form, offered unrelated programs for food, travel and merchandise discounts, or for long distance calling and Internet access.  Many consumers who clicked to “submit” an application were enrolled unwittingly into the programs, which initially charged their bank accounts up to $59.90 per month, and later charged up to $99.90 per year.

As alleged in the complaint, the defendants sent consumers’ bank account information to Landmark Clearing Inc. and other payment processors to electronically generate remotely created payment orders that debited consumers’ bank accounts.

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