A Missouri online payday loan company has been shuttered by The Federal Trade Commission (FTC). The firm allegedly bilked consumers out of tens of millions of dollars by trapping them into loans they never authorized and then using the supposed “loans” as a pretext to take money from their bank accounts.
The I Works scam continues to haunt CardFlex. In December 2010, the FTC charged I Works with scamming consumers out of more than $275 million via deceptive “trial” memberships for bogus government-grant and money-making schemes.
The FTC says the I Works credit card processing deception took in more than $26 million in illegal credit and debit card payments through the Visa and MasterCard payment networks. Three of the defendants have agreed to settle the FTC’s charges.
The Competition Commission has concluded that no real competition exists in the store credit card market. As a result, the CC estimates that British consumers are being bilked between GBP 80 million to GBP 100 million per year in excess prices paid for credit and
insurance. A provisional findings report was issued today by the CC after the matter was referred by the Office of Fair Trading in March 2004. The CC is required to issue its final report in March 2006.
The CC says store card APRs are on average some 10% to 20% higher across the store card market as a whole than they would have been had they
reflected providers’ costs, including the cost of capital. The CC concluded that there are features of the store card market that effectively insulate retailers and consumer credit providers from competitive pressures, notably from credit cards and store branded credit cards. There is therefore little competitive pressure either on APRs or insurance. Retailers’ primary concern is to avoid having an APR on their store card which is above those of other store cards. At the same time, consumers’ sensitivity to APR levels and other charges is low. Taken together, this results in store cardholders who take up credit, and associated insurance, paying more than they would in a fully competitive market. The CC says at the end of 2004, there were almost 14 million active store card accounts, with outstanding balances of about GBP 2.5 billion. The CC found that some 57% of store cardholders who used their card in a particular month took on interest-bearing credit. To correct the competitive situation the CC is considering requiring store issuers to place full information on statements; insert an APR warning notice on store card statements; provide and prominently display facility to pay outstanding balances by direct debit; and separate offer of payment, purchase and price protection insurance.
The Competition Commission has concluded that no real competition exists in the U.K. store credit card market. As a result, the CC estimates that British consumers are being bilked between $146 million to $183 million per year in excess prices paid for credit and insurance. A provisional findings report was issued today by the CC after the matter was referred by the Office of Fair Trading in March 2004. The CC is required to issue its final report in March 2006. The CC says store card APRs are on average some 10% to 20% higher across the store card market as a whole than they would have been had they reflected providers’ costs, including the cost of capital. The CC concluded that there are features of the store card market that effectively insulate retailers and consumer credit providers from competitive pressures, notably from credit cards and store branded credit cards. There is therefore little competitive pressure either on APRs or insurance. Retailers’ primary concern is to avoid having an APR on their store card which is above those of other store cards. At the same time, consumers’ sensitivity to APR levels and other charges is low. Taken together, this results in store cardholders who take up credit and associated insurance paying more than they would in a fully competitive market. The CC says at the end of 2004, there were almost 14 million active store card accounts, with outstanding balances of about $4.6 billion. The CC found that some 57% of store cardholders who used their card in a particular month took on interest-bearing credit. To correct the competitive situation the CC is considering requiring store issuers to place full information on statements; insert an APR warning notice on store card statements; provide and prominently display facility to pay outstanding balances by direct debit; and separate offer of payment, purchase and price protection insurance.
In a stinging rebuke of InterCept’s management and governance, venture capital firm Third Point Management Company is calling for the resignation of CEO John Collins and the dismissal of Directors: James Verbrugge, Arthur Weiss and Mark Hawn. In a letter to Collins, Daniel Loeb of Three Points, which owns 7.1% of InterCept, accussed the senior management and its Board of Directors of self-dealing and extensive conflicts of interest. Loeb says his investigation showed that the “good ol’ boy” set of ethics prevails at the firm at the peril of investors would want the processor on the selling block. Loeb took particular aim at a financial arrangement with Sprout Group, a venture capital affiliate owned by Credit Suisse First Boston calling it a sweetheart deal that “gave away the store.” InterCept, which recently sold its iBill division, has not reported first quarter results yet. For information on InterCept’s past performance visit CardData ([www.carddata.com][1]).
[1]: http://www.carddata.com
PayPal said this morning it has surpassed the 20 million account holder mark, which is double the number of registered members it had just one year ago. The company also expects that by mid-October more than $10 billion will have been sent by PayPal members through the network since launch of the service in October 1999. As of October 1, 2002, PayPal had 20 million member accounts, including 3.7 million business accounts. More than $3 billion was sent through the PayPal network in the first half of 2002. Tomorrow, PayPal will hold a special meeting of stockholders to vote on the proposed merger with eBay Inc. and Vaquita Acquisition Corp. (CF Library 8/22/02).
Another ATM investment scam was shut down this weekend. The California Corporations Commissioner and the Riverside County District Attorney’s office arrested a Newport Beach man for offering fraudulent investments in ATMs. Philip Gardner was charged with twenty-one counts of illegally and fraudulently selling securities as a result of selling over $1 million in investments through The ATM Store. Senior citizens were solicited through investment opportunity shows and newspaper ads promising returns of 40-100%. Investor funds were then diverted for personal use. ATM machines were not purchased or placed as promised and most investors lost their entire investment. Gardner has a history of securities law violations extending nearly 30 years. In February a Maryland firm offering investments in ATM machines was shut down by state government officials. Largo, MD-based Bankcard Group, Inc. allegedly bilked more than $3 million from 130 investors over the past two and a half years. According to the Maryland Attorney General’s office, the company offered investors a choice between buying an interest in an ATM machine or purchasing the machine outright. The Maryland Attorney General’s office says Bankcard Group sold 200 ATMs but only 44 were delivered and installed. (CF Library 2/1/01)
The SEC currently fields more than 100 complaints a day about illegal Web activity. In 1998 alone, the National Consumers League received 7,752 Internet fraud complaints. To help surfers identify a scam and avoid getting bilked, PC World’s July consumer report, “The Online Con,”, on newsstands June 15, outlines the top four Internet swindles — and what consumers can do to protect themselves. They scams to look out for include online auction fraud, pump and dump stock manipulation, multilevel marketing and credit card swindles.
The Federal Trade Commission’s said yesterday that ‘Operation Loan Shark’ has snagged a total of 37 telemarketing firms engaged in fraudulent advance loan schemes including advance fee credit card scams. Yesterday the Illinois Attorney General joined the federal crackdown by announcing a preliminary injunction against four Chicago area residents who allegedly bilked tens of thousands of consumers nationwide by offering a guaranteed VISA or MasterCard for advance fees ranging from $97.50 to $147.50. Illinois Attorney General Jim Ryan alleged the Chicago defendants collected the advance credit card fees by debiting consumers’ checking accounts and then sending then a ‘Consumer Express’ catalog charge card. Once consumers purchased $400 worth of merchandise from the catalog they would qualify to receive a credit card application. The Chicago group operated under several business names including Premier Card Services, Prime Credit Services, Tower Financial, Colonial Financial and Consumer Express.