Many consumers who need cash quickly turn to payday loans – short-term, high interest loans that are generally due on the consumer’s next payday after the loan is taken out. The annual percentage rate of these loans is usually very high – i.e., 390% or more. In recent years, the availability of payday loans via the Internet has markedly increased. Unfortunately, some payday lending operations have employed deception and other illegal conduct to take advantage of financially distressed consumers seeking these loans.
The FTC enforces a variety of laws to protect consumers in this area. The agency has filed many law enforcement actions against payday lenders for, among other things, engaging in deceptive or unfair advertising and billing practices in violation of Section 5 of the FTC Act; failing to comply with the disclosure requirements of the Truth In Lending Act; violating the Credit Practices Rule’s prohibition against wage assignment clauses in contracts; conditioning credit on the preauthorization of electronic fund transfers in violation of the Electronic Fund Transfer Act; and employing unfair, deceptive, and abusive debt collection practices. The FTC has also filed recent actions against scammers that contact consumers in an attempt to collect fake “phantom” payday loan debts that consumers do not owe. Further, the FTC has filed actions against companies that locate themselves on Native American reservations in an attempt to evade state and federal consumer protection laws.
- FloatMe ( )
- FTC Acts to Stop FloatMe’s Deceptive ‘Free Money’ Promises, Discriminatory Cash Advance Practices, and Baseless Claims around Algorithmic Underwriting ( )
- FTC Action Leads to $18 Million in Refunds for Brigit Consumers Harmed by Deceptive Promises About Cash Advances, Hidden Fees, and Blocked Cancellation ( )
- Federal Trade Commission Returns More Than $970,000 To Consumers Harmed by Deceptive Payday Lending Operation ( )
- Federal Trade Commission Sends out Second Round of Redress Checks in Payday Lending Scheme Operated by AMG Services ( )
- Payment Processor that Helped Bogus Discount Clubs Bilk Consumers Will Pay $2.3 Million as a Result of FTC Case ( )
- Statement by FTC Acting Chairwoman Rebecca Kelly Slaughter on the U.S. Supreme Court Ruling in AMG Capital Management LLC v. FTC ( )
- FTC Acts to Ban Payday Lender From Industry, Forgive Illegal Debt ( )
- FTC Halts Deceptive Payday Lender That Took Millions From Consumers’ Accounts Without Authorization ( )
- FTC and DOJ Return a Record $505 Million to Consumers Harmed by Massive Payday Lending Scheme ( )
- FTC Charges Debt Collection Operation Took Consumers’ Money for Phantom Debts ( )
- FTC Charges Defendants with Selling Fake Payday Loan Debt Portfolios ( )
- U.S. Court Finds in FTC’s Favor and Imposes Record $1.3 Billion Judgment Against Defendants Behind AMG Payday Lending Scheme ( )
- FTC Action: Payday Debt Relief Operation Banned from Debt Relief Business ( )
- FTC Returns Money to Consumers Harmed by Scam That Collected Millions in Phantom Payday Loan Debts ( )
- FTC and Illinois Attorney General Halt Chicago-Area Operation Charged with Collecting and Selling Phantom Payday Loan Debts ( )
- Data Broker Defendants Settle FTC Charges They Sold Sensitive Personal Information to Scammers ( )
- FTC Returns Money to Consumers Harmed in Payday Loan Ploy ( )
- FTC Secures $4.4 Million From Online Payday Lenders to Settle Deception Charges ( )
- FTC, Illinois Attorney General Halt Chicago Area Operation Charged With Illegally Pressuring Consumers to Pay ‘Phantom’ Debts ( )
- FTC Sues to Stop Deceptive Debt Relief Operation ( )
