FTC cracks down on Florida-based payday loan scheme

scam imageOf the scams that make my blood boil, payday loan scams are near the top of the list. People who are desperate for cash end up losing what little they already had.

Meanwhile the scammers get to live it up on other people’s money. And it’s so hard to track them down or really know who you’re dealing with if they rip you off.

The Internet is still a risky place when it comes to this type of scam, but at least one group of alleged payday loan scammers is out of the game thanks to the  Federal Trade Commission (FTC).

Operators of a payday loan broker scheme based in Tampa, Florida agreed to settle FTC charges that they falsely promised to help consumers get loans, then used the consumers’ financial information to take money from their bank accounts without consent.

Defendants Sean C. Mulrooney and Odafe Stephen Ogaga, and five companies they controlled, allegedly told consumers that 80 percent of all applicants received loans within an hour. According to the FTC, the defendants did not lend any money and there’s no evidence they helped anyone obtain a loan.

The defendants allegedly used financial information collected through its websites to withdraw $30 tens of thousands of consumers’ bank accounts, without authorization and without providing anything of value.

The settlement imposes a $6.2 million judgment and requires Ogaga to surrender nearly all his assets, including: $50,000 in cash and proceeds from the sale of his 2011 Rolls Royce Ghost, 2007 Lexus LS460, and 2006 Ferrari. Once Ogaga surrenders those assets, the rest of the judgment against him will be suspended. The judgment against Mulrooney is suspended due to his inability to pay.

The defendants are forbidden from:

  • marketing or providing any credit-related products or services, including loans, prepaid credit cards, debt-relief services, and credit repair services;
  • collecting, selling, or buying consumers’ personal and financial information, except in order to process a specifically authorized transaction; and
  • processing transactions using remotely created checks or remotely created payment orders.

In addition to Mulrooney and Ogaga, the complaint named Caprice Marketing LLC; NuVue Partners LLC; Capital Advance LLC; Loan Assistance Company LLC; and ILife Funding, LLC, formerly known as Guaranteed Funding Partners LLC.

BBB offers the following advice when looking for a personal loan:

  • Be careful where you put your information. Beware of applying for online loans through unfamiliar businesses or websites. Many of these online application sites are run by scammers or by people who sell your information to scammers.
  • Don’t pay advance fees. Understand that any business operating by phone and charging insurance or other fees in advance of making a loan is operating illegally.
  • Verify the address. Do not do business with anyone who cannot give you an address that you can confirm as legitimate.
  • Read the contract. Read any contract carefully and make sure you understand all requirements before entering into any agreement.
  • Don’t get tricked by “official-looking.” Official-looking loan documents and sophisticated looking websites are easy to copy or fake. Just because a business appears legitimate, doesn’t mean it is.
  • Do your research. Find an Accredited Business using BBB’s Member Pages, and check out the company’s BBB Business Review before purchasing anything from a website.

To check out a company and find trustworthy businesses, visit bbb.org. Find other news story topics by visiting our Press Release News Center.