Category Archives: Trends

Payday Loan Collector Stopped by Federal Trade Commission

By: Royal Paine. At the request of the Federal Trade Commission, a U.S. district court has halted a Georgia-based operation from using deception and threats to collect $3.5 million in phantom payday loan “debts” that consumers didn’t owe pending trial. The court had previously ordered the defendants’ assets frozen to preserve the possibility that they could be used to provide redress to consumers, and appointed a receiver.

Norcross, Georgia resident John Williams and two companies he controls used a variety of false threats to bully consumers nationwide into paying supposed payday loan debts, the FTC charged. Williams; Williams, Scott & Associates, LLC; and WSA, LLC falsely claimed to be affiliated with federal and state agents, investigators, members of a government fraud task force, and other law enforcement agencies, and pretended to be a law firm, according to the FTC complaint. The defendants also allegedly told consumers their drivers’ licenses were going to be revoked, and that they were criminals facing imminent arrest and imprisonment.

The FTC alleges that many consumers the defendants contacted had inquired about a payday loan online at one time, and submitted contact information, which later found its way into the defendants’ hands.

“Many consumers in this case were victimized twice,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “First when they inquired about payday loans online and their personal information was not properly safeguarded, and later, when they were harassed and intimidated by these defendants, to whom they didn’t owe any money.”

The FTC alleged that the defendants’ tactics violated the Federal Trade Commission Act and the Fair Debt Collection Practices Act. In addition to the deception and false threats,  the defendants violated federal law by telling consumers’ family members, employers, and co-workers about the debt; failing to identify themselves as debt collectors; using profanity; making repeated inconvenient or prohibited calls; failing to provide information in writing about the debt; and making unauthorized withdrawals from consumers’ bank accounts.

This is the FTC’s sixth recent case charging “phantom debt” scams with law violations.  Other cases include American Credit Crunchers, LLC, Broadway Global Master Inc., Pro Credit Group, Vantage Funding, also known as Caprice Marketing, and Pinnacle Payment Services, LLC.

Payday Loan Lender Bites the Dust: Cash Store-Instaloans

The Cash Store Financial Services Inc. payday loan product is out of business!

The Cash Store Financial Services Inc., The Cash Store Inc., TCS Cash Store Inc., Instaloans Inc., 7252331 Canada Inc., 5515433 Manitoba Inc., 1693926 Alberta Ltd. doing business as “The Title Store”. (each one and all of the above , collectively, the “Applicants”) obtained an Initial Order (the “Initial Order”) under the Companies’ Creditors Arrangement Act (the “CCAA”). The Applicants sought and were granted the stay of proceedings and other relief provided under the CCAA. Pursuant to the Initial Order, FTI Consulting (“FTI” or the “Monitor”) has been appointed Monitor.

For additional information please contact the Monitor: Phone: 416-649-8105 Toll Free: 1-855-774-4790 Email: cashstorefinancial@fticonsulting.com

Car Title Lenders Cancel $816,000 With Consumers

Fast Auto Loans Inc. and Virginia Auto Loans agreed to “forgive” $816,000 in consumer car title loans. Additionally, they agreed to pay the state of Virginia $415,00

Car title loans are not legal in Virginia but thousands of borrowers choose to cross state lines for them every year.  If the consumer fails to pay off their car title loan as agreed, their car is certain to be repossessed. APR’s (annualized percentage rates) vary from 120% to 300%+.

It’s common for car title and payday loan companies to call the references borrower’s provide on their application page. And in spite of the Federal Credit Reporting Act, they often reveal your default status with them!

The lawsuit alleged the two car title loan lenders “abused and harassed consumers by calling them at work and at home and disclosed the borrower’s debts to family, friends, and employers listed as references on the apps. Additionally, the borrower’s were threatened with jail and criminal prosecution.”

The two companies denied the allegations.

For more details visit West Virginia Attorney General Patrick Morrisey’s website.

 

A Day In The Life of a Payday Loan Collector

Payday Loan Collections
Payday Loan Collections

By Frank at PaydayLoanCollections.com: “I empathize with our collection people. It’s a cubicle job in a call center. Our collectors average 192 calls per shift and are lucky to get 8 delinquent borrowers to stay on the phone with them. Those borrowers who do talk to our collectors are PISSED! We have to track them down. The job really sucks. Collectors earn bonus money on what they collect but it’s brutal.  It’s a tough way to make a living  and few payday loan collectors are good enough at it to earn their bonus money. Many of my collectors are in debt to other payday loan lenders. They’re as bad off as the borrowers they’re calling.”

“Our collection center employee turnover is unreal. Collectors are issued ID cards by my IT department. Collectors are simply  a number to us. IT has collectors swipe their cards, take their photo, and have them enter a PIN number. This enables payday loan collectors to log into a PC, get their phone extension, clock in, and access the building (all doors are of course controlled ingress). Their email is “TheirExtension@collections.PaydayLoanCollector.com. The extension is the number on the ID card.”

“The ID cards do not have their names or their picture. If they lose the card, they’re terminated if they fail to memorize their number on their ID card.”

“After 90 days, they get a real ID, which also provides them with an email address with their name on it! Nirvana!”

The #1 goal of a payday loan collector is to FOCUS on collecting money from you NO MATTER HOW BROKE YOU ARE.”