On March 9, 2015, the New York Department of Financial Services (“NYDFS”) announced that it entered a consent order with a “lead generation” payday lender where the lender agreed to pay a $2.1 million penalty, provide new warnings to consumers, and cease operations in the state. Payday lending is illegal in New York. “Lead generation” firms market payday loans to consumers, and sell the information provided by interested consumers to payday lenders outside the state. According to the agreement with the NYDFS, 800,000 New Yorkers allegedly provided information to the lead generation firm, with APR rates of 261% to 1304%. This lead generation firm also used a celebrity to endorse its activities. Following the settlement, the celebrity agreed to withdraw his endorsement.
Blog Enforcement Watch March 09, 2015