Home Restaurant Profit FTC Announces $ 114 Million Settlement With Payday Lenders | Goodwin

FTC Announces $ 114 Million Settlement With Payday Lenders | Goodwin

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[author: Jackie Odum]

On February 11, 2021, the Federal Trade Commission (FTC) ad a $ 114 million settlement with the owners and operators of a so-called tribal payday loan program. Settlement resolves allegations of defendants’ alleged violations of the Unfair or Deceptive Practices (UDAP) provisions of the Federal Trade Commission Act (FTC Act), 15 USC § 45 (a), Telemarketing and Consumer Fraud and Abuse Prevention Act (Telemarketing Act), 15 USC §§ 6101-6108, FTC’s Telemarketing Sale s Rule (TSR), 16 CFR Part 310, the Truth in Lending Act (TILA), 15 USC §§ 1601-1666j, the Electronic Funds Transfer Act (EFTA), 15 USC §§ 1693-1693r, and its implementing regulations E, 12 CFR Part 1005.

In the complaint, the FTC alleged that payday lenders set up a fraudulent scheme to use deceptive marketing to convince consumers that their loans would be repaid in a fixed number of payments. Instead, payday lenders would have continued to withdraw funds from consumers’ bank accounts long after their loans were paid off. The FTC further alleged that these illegal withdrawals only stopped when consumers closed their bank accounts or found some other way to cut payments.

the regulation expects payday lenders to pay more than $ 114 million, part of which will be suspended due to inability to pay. As part of the settlement, payday lenders are required to forgo any outstanding consumer loans. In addition, payday lenders are permanently banned from the industry.

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