WASHINGTON (8/14/15)--A data broker is facing charges from the Federal Trade Commission (FTC) for allegedly having illegally sold payday loan applicants’ financial information.
The FTC complaint accuses Sequoia One LLC, Gen X Marketing Group LLC, Jason A. Kotzker, Theresa D. Bartholomew, John E. Bartholomew Jr. and Paul T. McDonnell of selling data to companies such as Ideal Financial Solutions Inc. that then raided more than 500,000 accounts of at least $7.1 million.
According to the FTC, the defendants often sold payday loan applications to Ideal Financial for roughly 50 cents each, while legitimate lenders pay up to $100 or more. The complaint alleges they did this knowing that Ideal Financial was making unauthorized bank account debits and credit card charges.
The complaint also alleges the defendants helped hide Ideal Financial’s fraud by using fine-print disclosures on their websites as well as other misleading tactics to avoid alerting financial institutions to the fraudulent activity.
McDonnell, Bartholomew and Bartholomew Jr. have agreed to settle the FTC charges. The Bartholomews have been hit with a $7.1 million judgment that will be suspended upon payment of $15,000. McDonnell has been subject to a $3.7 million judgement, which will be suspended due to his inability to pay.
The full judgments will become due immediately if these defendants are found to have misrepresented their financial condition. Litigation against the other defendants continues.