If you wonder about the online sites that offer quick cash and make it seem so easy to get money, a recent Federal Trade Commission (FTC) settlement with questionable “lenders” pulls back the curtain on how they work.
The FTC sued Timothy A. Coppinger, Frampton T. Rowland III and their companies for allegedly swindling millions of dollars from people who gave their personal information to online sites that offer quick cash.
Many inquired about loans, but never actually applied for them. Yet they found money deposited in their accounts without their permission. That made them responsible for high interest payments and recurring finance charges.
HOW ONLINE SITES THAT OFFER QUICK CASH WORK
So here’s how it can happen. The sites that offer “fast cash,” ” fast installment loans,” “easy fast cash,” “bad credit fast cash loans,” and more don’t lend money.
The FTC describes these companies as “lead generators.” They pull you in and ask for all your personal financial information including your checking account number. These lead generators then bunch many people’s information together in a bundle and auction the bundle off to the highest bidder.
That’s where the shady lenders step in. They now have your information and can make loans whether or not you want them.
And you might want to take extra care when you give your information out even if you think you need money immediately.
In the recent settlement with the lenders, the FTC says after the companies deposited money in consumers’ accounts they withdrew recurring fees that didn’t go to pay down the principal owed.
FTC’s complaint says, “the defendants told consumers they had agreed to, and were obligated to pay for, the unauthorized “loans.” To support their claims, the defendants provided consumers with fake loan applications or other loan documents purportedly showing that consumers had authorized the loans. If consumers closed their bank accounts to stop the unauthorized debits, the defendants often sold the “loans” to debt buyers who then harassed consumers for payment.”
A federal judge in the Western District of Missouri approved a settlement with the lenders that does not send them to prison, but it does cancel consumers’ debts and bars the lenders from reporting the debts to credit reporting agencies and from future involvement in the lending business.
The settlement orders the defendants to repay about $54 million. At this point, the FTC doesn’t say how consumer’s will get their share of the repayment. Stayed tuned.
The defendants are Coppinger and his companies, CWB Services LLC, Orion Services LLC, Sandpoint Capital LLC, Sandpoint LLC, Basseterre Capital LLC, Basseterre Capital LLC, Namakan Capital LLC, and Namakan Capital LLC, and Rowland and his companies, Anasazi ervices LLC, Anasazi Group LLC, Vandelier Group LLC, St. Armands Group LLC,; Longboat Group LLC, doing business as Cutter Group, and Oread Group LLC, d/b/a Mass Street Group.