Payday Loan Law: Sen. Markey and FTC On The Hunt

payday loan legalitiesSenator Ed Markey of Massachusetts asked the FTC to snoop around payday loan lead generators. If you run a lead generator website for payday loan programs, consider an audit for your operation.

Sen. Markey Pushes To Investigate

On December 4, 2013, Markey sent a letter to FTC Chairwoman Helen Ramirez. In it, he urged the agency to explore privacy issues related to payday loan companies. Basically, he suspects rampant and egregious violations of Section 5 of the FTC Act, which governs “unfair and deceptive marketing.”

In his missive, Markey relayed the story of a reporter who gave information to a payday loan site. According to the Senator’s letter, the reporter was “bombarded” with multiple loan agent introductions within minutes. The journalist hadn’t authorized distribution.

“These business practices raise a number of concerns about what these lead generator websites do with consumers’ personal information, whether they store and secure it and whether these websites sell this personal information without consumers’ knowledge of consent,” opined Markey.

Not only is Markey concerned about possible privacy breaching aspects of payday loan generation, but he also isn’t thrilled about the sensitive nature of collected information, like social security numbers and bank account routing codes.

“I believe an investigation of this (payday lender) practice would fall within the FTC’s mandate as stipulated in Section 5 of the Federal Trade Commission Act with respect to protecting Americans from ‘unfair and deceptive acts or practices,’” concluded Markay.

Markey Spearheaded The FTC Data Broker Probe, Too

This is not the first time the Massachusetts senator has taken up arms for consumers when it comes to online privacy issues. Last year, at almost exactly this time of year, Markey sent a similar letter to the FTC regarding data brokers. And yes, the commission did look into the matter and came down hard on some data brokers. So, if you operate a payday loan generation website, it’s time to be vigilant and review your procedures to ensure you’re operating on the right side of the law.

Payday Loan Industry Lawyer

Need a lawyer with payday loan business experience? Contact Aaron Kelly. He has tons of experience with the issues short-term loan operators face.

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