Lead aggregator agrees to pay $ 4 million to settle CFPB lawsuit
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A senior online aggregator for payday and installment loans has agreed to pay $ 4 million to settle a lawsuit filed by the Consumer Financial Protection Bureau. The lead aggregator also agreed to a permanent ban on lead generation, lead aggregation, and data brokering for certain high interest consumer loans.
In 2015, the CFPB filed a trial v D and D Marketing, Inc. d / b / a T3 Leads (“T3”) in United States District Court for the Central District of California, Western Division, alleging that T3 violated the Consumer Financial Protection Act of 2010 (“CFPA”), 12 USC §§ 5531, 5536 (a), 5564 and 5565, engaging in unfair and abusive behavior. The lawsuit alleged that T3 – which acted as an intermediary between lead producers and primary buyers – failed to verify and monitor how lead producers obtain and use consumer data for payday loans and high interest installment.
The CFPB claimed that major T3 producers mistakenly represent themselves as lenders or mistakenly suggest that lenders connected to the consumer through T3 meet certain standards or offer consumers the best rates or lowest fees. However, according to the CFPB, many T3 lenders (the main buyers) were organized by Indian tribes and / or under the laws of foreign jurisdictions (offshore lenders) and therefore were not subject to state laws or regulations. The CFPB alleged that T3 knew or should have known about the risk these alleged bad actors posed to consumers when buying and selling leads.
To settle the dispute, T3 entered into a Final judgment and order stipulated, agreeing to pay $ 1 million to a fund for injured consumers and $ 3 million to the CFPB. T3 has also agreed to never act as a lead generator, lead aggregator, or data broker for certain high interest rate loans (over 36% per annum). Finally, T3 has undertaken not to disclose, use or benefit from customer information obtained by March 28, 2019 at the latest as part of the reception of prospects or the sale of prospects. T3 has denied any responsibility when entering the Order.
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