Consumer Finance Insights
June 4, 2020

FTC Obtains Temporary Restraining Order Against Tribal Payday Lending Enterprise

On May 22, 2020, the Federal Trade Commission (FTC) announced that it had obtained a temporary restraining order against a payday lending enterprise for alleged violations of the Federal Trade Commission Act, the Telemarketing Sales Rule, the Truth in Lending Act and Regulation Z, and the Electronic Funds Transfer Act and Regulation E.  The United States District Court for the District of Nevada issued the order on May 19, freezing the defendants’ assets and halting their business activity.

The FTC alleged that the numerous corporate and individual defendants deceived customers through internet websites and telemarketing by telling customers their loans would be repaid after a fixed number of payments, when in fact the defendants continued to make withdrawals from customers’ checking accounts, allegedly overcharging customers millions of dollars.  The FTC also alleged the defendants failed to make certain loan disclosures.  In its comp​laint, the FTC alleged that all the defendants are jointly and severally liable under a common enterprise theory because the entities allegedly have common ownership, managers, business functions, and office locations.  In addition to a temporary restraining order, the complaint seeks a permanent injunction, consumer relief, and attorneys’ fees and costs.