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FTC files suit against data brokers for selling to payday loan scammer

The Federal Trade Commission charged a data broker operation for illegally selling the financial information of payday loan applicants to scammers, who raided the accounts for at least $7.1 million.

According to the FTC’s complaint, Sequoia One LLC and Gen X Marketing Group LLC bought loan applications from the operators of payday loan web sites or retrieved other consumer data from their own payday loan web sites. The brokers sold the information for more than 500,000 consumers to a company like Ideal Financial Solutions, knowing that the company was making unauthorized bank account debits and credit card charges. Some of the consumers had to close their accounts or were charged fees for insufficient funds. This is why reviewing loan companies is so important as it can avoid things like this from happening.

The FTC is seeking a permanent injunction against defendants Sequoia One LLC, Gen X Marketing Group LLC, and individuals associated with the companies, Jason A. Kotzker, Theresa D. Bartholomew, John E. Bartholomew, Jr., and Paul T. McDonnell.The Bartholomews and McDonnell agreed to settle FTC charges.

Under consumer protection chief Jessica Rich, the FTC has brought a number of cases against online payday lending scams that prey on cash-strapped consumers.

“Companies that collect people’s sensitive information and give it to scammers can expect to hear from the FTC,” Rich said.

The FTC filed the complaint in the U.S. District in Nevada.