FTC Mails Refunds to Payday Loan Scam and Debt Relief Scam Victims

The Federal Trade Commission is mailing checks to consumers who fell victim to an alleged payday loan scam and an alleged debt relief scam. If you receive a check from the FTC, please cash it within 60 days.

CWB Services Payday Loan Scam

According to the FTC, it is mailing checks worth a total of $2.9 million to nearly 73,000 consumers who lost money in a payday loan scam allegedly perpetrated by a company called CWB Services and related defendants.

The CWB defendants allegedly created fake payday loan agreements using financial information they purchased from third parties and then took fees out of consumers’ bank accounts without their permission.

The FTC also alleges that the CWB defendants deceived consumers about the cost of the payday loans, even in cases in which a consumer actually authorized the loan. The lenders allegedly informed consumers that the total payments on the payday loan would include only the principal plus a one-time finance charge.

However, the CWB defendants allegedly withdrew biweekly payments from consumers’ accounts, but did not put any of these payments toward the principal. In effect, consumers were making interest-only payments with no end in sight unless they contested the payments or paid down their loans.

The FTC reviewed bank records and determined that the CWB defendants scammed consumers out of $49 million in less than one year.

The average refund amount from the payday loan scam is $40.61. If you receive a check and have questions about the payday loan scam case, contact Epiq Systems Inc. at 888-521-5208.

United Debt Counselors Debt Relief Scam

The FTC is also mailing checks worth a total of $480,000 to 5,745 victims of an alleged debt relief scam perpetrated by United Debt Counselors.

According to the FTC, United Debt Counselors mailed advertisements that were designed to look as if they were official documents sent from an attorney or a bank. These advertisements claimed that a typical customer would become debt free within 36 months. These direct mail ads reportedly reached up to 100,000 consumers per week.

The FTC accused United Debt Counselors with misleading customers about its services and charged them upfront fees without having the customer first meet face-to-face with a knowledgeable sales representative, in violation of the FTC’s Telemarketing Sales Rule.

Instead of sending knowledgeable sales representatives to meet with consumers about the debt relief services, United Debt Counselors reportedly sent notaries public to show a sales video and witness the signing of contracts. These notaries were not knowledgeable about the services purportedly offered by United Debt Counselors, according to the FTC.

Of the consumers who bought United Debt Counselors services, fewer than half completed the program and even fewer were debt-free after 36 months, the FTC says.

According to the March 15, 2017 FTC order, the United Debt Counselors defendants are prohibited from making misrepresentations about debt relief services and from making unsubstantiated claims about its products or services. Additionally, they can only charge advance fees if they comply with the TSR and any sales representative making face-to-face sales presentations must be able to discuss material terms of the agreements in specific detail and answer consumers’ questions.

The average refund amount from the debt relief scam is $84.27. If you receive a check and have questions about the debt relief scam case, contact Rust Consulting Inc. at 855-263-3449.

UPDATE: December 2018, the FTC will be mailing a second round of checks to consumers who paid United Debt Counselors for the debt relief scam. Another 3,186 checks totaling more than $92,000 will be mailed because money remains in the settlement fund.

UPDATE 2: January 2019, the FTC is mailing a second round of checks for the CWB Services payday loan scheme settlement. The second mailing totals more than $900,000 and will be split between 31,847 consumers.