(NNPA)—The Federal Trade Commission (FTC) will provide $32 million in relief to consumers who were caught in a maze of charges and fees designed to trap them in payday loans they never authorized. The enforcement action announced July 7, affects two lenders based in Kansas City, Mo. who operated as many as 16 different businesses involved in online lending. The FTC also imposed an additional $22 million fine against the lenders and banned them from all consumer lending.
Members of Congress are urging the FTC to take similar action against similar violators.
Every day online and storefront payday lenders trap borrowers in long-term cycles of debt. Their triple-digit interest rates and access to borrowers’ bank accounts or car-titles place these borrowers in financial jeopardy. FTC’s actions and others undertaken by federal and state regulators reveal rampant abuses in the short-term, small-dollar lending market.
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