Online Lenders Accused of Forging Checks

     SAN FRANCISCO (CN) – A federal class action claims Internet payday lenders EDebitPay and Platinum Online Group take information from loan applicants “and use it to forge checks on behalf of the applicants … without the applicants’ knowledge or consent.”




     Both defendants companies are LLCs that operate out of Sherman Oaks. The two named plaintiffs are a woman from San Francisco and a man from Malibu.
     “Defendants operate a scam where they lure people into applying for payday loans on Internet websites,” according to the complaint. “Defendants take the information they gather from the payday loan applications – including the applicants’ banking information – and use it to forge checks on behalf of the applicants. These checks are fakes; they are created without the applicants’ knowledge or consent. These checks supposedly pay for defendants’ coupon service, though no applicant ever agreed to buy such services. In fact, the idea that a cash-strapped, payday loan applicant would spend money on defendants’ coupon service, the purpose of which is to encourage a person to spend additional money with defendants’ coupons, is absurd. The money is transferred from the applicants’ checking accounts to defendants’ account before the applicants realize that the forged checks have been drawn or that withdrawals have been made. Defendants have performed this scam thousands of times, and robbed people in need of their remaining money.”
     Both named plaintiffs say they “specifically did not register and/or rejected all third party offers that were advertised on the payday loan websites” when they sought payday loans from the defendants in May this year. Both say that without their knowledge or consent, the defendants used their personal information to register them for the defendants’ online services.
     “However, plaintiffs had never heard of defendants’ coupon services, let alone registered for these services.”
     Both say the defendants “drafted remotely created checks” from their checking accounts, payable to Platinum Online Group, without permission, and deposited the checks.
     They seek restitution, costs and damages. They are represented by Karl Kronenberger with Kronenberger Burgoyne.

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