FTC Moves to Shut Down Alleged Payday-Loan Scheme

September 5, 2013
Wall Street Journal MoneyBeat blog  
payday lending news

The Federal Trade Commission (FTC) has taken action against a group of Tampa-based businesses that promised to connect consumers over the Web with payday lenders that could provide quick cash. The operation run by Sean Mulrooney and Odafe Stephen Ogaga claimed to be affiliated with a network of 120 payday lenders. The pair advertised that 80 percent of applicants received loans for up to $1,000 as quickly as in an hour.

Instead of finding loans for would-be borrowers, however, Mulrooney and Ogaga allegedly used the business websites to collect personal information and deduct money from customers’ bank accounts, bilking more than $5 million from tens of thousands of consumers and violating the Federal Trade Commission Act in the process. A judge has granted the FTC’s request for a temporary restraining order against the business operation, and a hearing on whether to issue a preliminary injunction against it is scheduled for Sept. 12. The FTC lawsuit is seeking a permanent injunction in addition to restitution and customer refunds.










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