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FTC Whacks Lenders

RENO (CN) - The Federal Trade Commission demands that a group of British lending institutions stop issuing high-fee "payday loans," and threatening to arrest customers who fail to repay them. The FTC says that Cash Today, Route 66 Funding, Global Financial Services International, Interim Cash and BIG-INT Ltd. failed to disclose annual percentage rates, payment schedules, amounts financed, total payments, or late payment fees.

According to the federal complaint:

The defendants demanded that customers disclose their Social Security and bank account numbers. After paying "sometimes hundreds of dollars above the loan amounts," some customers terminated defendants' access to their bank accounts, thinking they had more than repaid their loans.

The lenders then threatened them with arrest and imprisonment, and threatened to sue, seize property or garnish wages.

Defendants made harassing calls to customers' jobs, using "obscene, profane, threatening or otherwise abusive language ... in an effort to intimidate consumers into providing their new bank account numbers so that defendants can resume debiting consumers' checking accounts."

"When consumers challenge defendants' abusive collection practices as illegal, defendants routinely tell consumers that because they are located in the United Kingdom, they do not have to comply with U.S. laws," according to the complaint.

Also sued are Aaron Gershfield, Ivor Gershfield, and Jim Harris.

The FTC demands an injunction, rescission of contracts, disgorgement of ill-gotten gains, and repayments.

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