Payday Lender to Pay $9.5 Million

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A federal judge just handed  a big victory to consumers and the Federal Trade Commission (FTC).  U.S. District Court Judge John Antoon II, in Orlando, ruled that a payday lender illegally debited consumers’ bank accounts when they visited the company’s websites seeking payday loans. 626,000 consumers were enrolled in programs and charged for services they didn’t want. Now Judge Antoon says they are owed $9.5 million.

The judge found that Direct Benefits Group LLC, Voice Net Global LLC, Solid Core Solutions Inc., WKMS Inc., Kyle Wood, and Mark Berry  failed to disclose that they would use consumers’ bank account information to charge them for enrollment in unwanted programs and services

Warning for Others

This details of this case provide a cautionary tale for all of us who fill in online applications and surveys. It’s extremely important to read everything carefully.

In this instance, the FTC found that when someone applied online for a payday loan they were asked for  personal and financial information. During the application process pop-up ads jumped on the screen for other services and unrelated programs for food, travel and merchandise discounts, or for long distance calling and Internet access. An undercover FTC investigator found that confusing instructions led him to press “OK” and sign up for a phone service he didn’t want.  This experience was shared by consumers who complained to the FTC.

Judge Antoon cited testimony from eight consumers. All filled out payday loan applications on one of WKMS’s websites and later discovered debits from their bank accounts that they did not recognize. Three of the eight recalled seeing a pop-up box but did not read the contents of the pop-up box. One explained that the box “look[ed] like a normal ‘I accept these terms and conditions’” type of box, and she assumed it was part of the terms and conditions of the payday loan, so she pressed OK as the box directed. Another did not recognize the pop-up box that she was shown in court as the one she recalled. The third thought the box had to do with the loan itself, and when she was unable to “x out” of the box, she eventually clicked “OK.” The other five consumers did not recall seeing a pop-up box during the loan application process.

Consumers were charged $39.95 to $99.90 per year for these unwanted services. Canceling the services was difficult, although many did.  But if you are one of the consumers victimized by this group, keep an eye out on ConsumerMojo.com. We’ll follow up with the details about refunds.

In the meantime, WATCH CONSUMERMOJO.COM’S VIDEO What’s Wrong with Payday Loans?

 

Published by

Barbara Nevins Taylor

As the winner of 22 Emmy Awards and a slew of journalism honors and awards, I created ConsumerMojo.com to give you the straight story about complicated stuff. Tell us what you want to know and we'll get you the answers.