Radio and the internet were in the advertising mix of companies which offered to help consumers get out from under payday loans but who in fact, per the FTC, “took the money and ran.”
Consumers, instead of getting the relief they sought, merely wound up deeper in debt.
“The defendants promised to help people struggling to make payments on their payday loans,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Instead, they took the money and ran, leaving their customers deeper in debt.”
The FTC provide two sample advertising claims found on radio and internet ads:
“Are payday loans ruining your life? Do you have more payday loans than you’re able to pay back right now? If you have two or more payday cash advance loans, listen closely…”
“All you need is two or more payday loan cash advances to qualify. Even if you’re behind, in collections or have bad credit. We’ll even help you with your internet payday loans…”
The ads were used to harvest leads for follow-up telemarketing calls making a series of promises with the implication that debts would be paid off interest and fee free. Consumers paid between $98 and $160 every two weeks for the service.
FTC alleged, “In reality…the defendants provide little or no debt relief services for their clients, and their limited actions do not generally eliminate or even reduce most clients’ payday loans. While the defendants send ‘validation” form letters to some lenders, the lenders typically have ignored these letters and continued their collection efforts. Based on this conduct, the FTC has charged the defendants with violating the FTC Act, which prohibits deceptive acts and practices, and the agency’s Telemarketing Sales Rule, which prohibits abusive and deceptive telemarketing practices.”
The defendants include:
1) PSC Administrative, LLC, formerly known as Payday Support Center, LLC;
2) Coastal Acquisitions, LLC, doing business as Infinity Client Solutions;
3) Jared Irby, individually and as an officer of PSC Administrative, LLC; and
4) Richard Hughes, individually and as an officer of PSC Administrative, LLC.
The FTC is seeking an end to the deception and monetary penalties.
