The Federal Trade Commission and a U.S. District Court have shut down several online payday loan companies that allegedly promised loans to consumers but instead bilked them out of more then $5 million. Preying on people in need of immediate funds, the companies apparently collected personal information, including bank account numbers, and then began withdrawing funds in small amounts without authorization.
BBB of Southern Nevada and BBB of E. Missouri and S. Illinois assisted the FTC with this investigation by providing information on more than 1,700 complaints on seven different companies, some of which had BBB Business Reviews with alerts.
The defendants in the case, Sean C. Mulrooney and Odafe Stephen Ogaga, control five companies and numerous websites. They have claimed to be affiliated with a network of 120 payday lenders, and they obtained banking and other personal information from websites they controlled (“online applications” for payday loans) and from third parties. The court froze their assets in order to provide possible redress to the tens of thousands of consumers who were ripped off.
Although the FTC has stopped these fraudulent efforts, there are plenty more out there, and consumers need to be very cautious when sharing personal identification such as bank account, credit card or government identification numbers.
For more information on this case, go the FTC website.
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