Oversight, Regulation

U.S. court shuts down alleged phony payday loan operation in Florida

150px-US-FederalTradeCommission-Seal.svgA U.S. district court shut down a Florida-based payday loan operation amid allegations by the FTC that the company used consumers’ personal financial information to debit their bank accounts without authorization.

The defendants, Sean C. Mulrooney and Odafe Stephen Ogaga, as well as five companies they controlled, allegedly claimed to be affiliated with a network of payday lenders and used websites to collect consumers’ names, Social Security numbers, bank routing information and account numbers.

“Repeatedly, we’ve seen situations where consumers provide sensitive financial information when inquiring about a payday loan online, and that information falls into the wrong hands,” Jessica Rich, the director of the FTC’s Bureau of Consumer Protection, said. “The FTC is committed to shutting down these fraudulent operations.”

The FTC also alleges that the defendants obtained other consumers’ financials by paying more than $500,000 to third parties and then debited those consumers’ accounts without authorization. The commission alleges that the defendants victimized thousands of consumers, ultimately stealing more than $5 million from their bank accounts.

Additionally, the FTC alleges that Mulrooney and Ogaga used proceeds from the scheme to finance a lavish lifestyle. Mulrooney is the registered owner of a Maserati GranTurismo, and Ogaga owns a Rolls Royce Ghost and Ferrari 430.

The case is the third involving allegedly fraudulent online payday loan-related operations. The court complaint charges Mulrooney and Ogaga with violating the FTC Act by using unfair billing practices and by misrepresenting their services to consumers.

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