FTC Mailing 2nd Round of Online Payday Loan Application Refund Checks

The Federal Trade Commission has announced that it will be mailing a second round of checks to consumers who were charged a monthly fee after they applied for a payday loan online using a website operated by certain defendants.

The first round of refund checks was mailed in September 2015. Because there is money remaining in the fund, the FTC will reportedly mail 23,000 additional checks totaling about $990,000.

The FTC claimed that defendants Direct Benefits Group LLC, Voice Net Global LLC, Solid Core Solutions Inc., WKMS Inc., Kyle Wood and Mark Berry failed to make it clear to consumers that they would be charged for enrollment in unrelated programs and services after applying for a payday loan online.

According to the FTC lawsuit, some of the websites operated by the defendants include CityWestFinancial.com, MyPayDayAngel.com, PayDayPickup.com, JuniperLoans.com, NorthCityMutual.com and MyCashPickup.com. These websites reportedly portray themselves as a way to apply for payday loans online.

“However, Defendants’ websites are not online applications for payday loans, but instead are vehicles to collect financial information from consumers,” the FTC lawsuit states.

According to the FTC, consumers who applied for a payday loan through one of the defendants’ websites were asked to provide personal and financial information, such as their Social Security numbers, drivers’ license numbers and bank account numbers.

“With this information, Defendants enroll consumers into their programs for which they charge membership fees,” the FTC lawsuit asserts.

Before the consumers submitted their payday loan application form, the FTC says they were offered a number of unrelated services such as discount programs for food, travel and merchandise, or for long distance calls and internet access.

Many consumers did not notice the additional program offers but were charged up to $59.90 per month for the services. Even consumers who declined the offers were reportedly subjected to this monthly charge, according to the FTC.

These consumers were “enrolled unwittingly” into one of these programs, the FTC asserts.

The FTC lawsuit asserts that the defendants sent consumers’ payment information to a payment processor in order to create and deposit remotely created payment orders, which look like pre-authorized bank checks.

These checks are reportedly processed by the consumer’s bank as if they were regular checks.

“Consumers typically do not discover that they have been enrolled in one of the Defendants’ programs until they see a debit that they do not recognize on their bank statement or until they are contacted by their bank because their accounts are overdrawn as a result of the unanticipated debit,” the FTC lawsuit states.

A federal judge found that the online payday loan defendants illegally took money out of consumers’ bank accounts when they submitted their information to apply for a payday loan. The judge found that the monthly charges were debited from consumers’ bank accounts without their consent.

In addition to offering refunds to affected consumers, the court also issued a permanent injunction to stop the illegal business practices.

If you have questions about the online payday loan application case, you can call 1-877-255-2804 for more information.