Citizens of Hawaii are urged to be careful with online money lending services. Such warning came from the Department of Commerce and Office of Consumer Protection.
People who apply for online loans are required to provide some sort of personal data which then may be sold to data brokers.
Then this personal data may be again resold to money lenders. This is the way how money lenders may get access to consumers’ bank accounts and to charge self-willed fees or to deposit loans which are not corresponding to the initial contract.
OCP representatives warn that citizens should be very careful with sharing such personal data like ID number, bank details, personal details, and other financial information to unchecked people or organizations online, in writing or orally.
Recently Hydra Group was accused of using the non-legal tricks in order to avoid regulatory supervision by the Consumer Financial Protection Bureau. It was declared that Hydra Group runs its business under different legal entities: PCMO Services, Hydra Financial Limited Funds, SSM Group and others. The CFPB noticed that Hydra’s customers started having problems after using an online service that matched them with direct money lenders.
Customers had to provide the lead generator with some sensitive personal financial information. Providers sold this personal information to payday cash lenders.
Sometimes data brokers purchase the information from the provider and then companies providing payday cash advances purchase it from data brokers. After having bought the personal sensitive data lenders, like Hydra Group, deposit on consumers’ bank accounts unauthorized loans and debit self-willed fees.
When consumers turned to the company to find out where an unauthorized loan appeared from the lender showed them fictitious contracts ostensibly defending the operations. In case consumer closes the account aiming to get rid of unauthorized loans and fees fictitious outstanding credit is sold to money collectors which then chase consumers unless the debt is repaid.
Arm of the Law
In the beginning of September the U.S. Court for the Western District of Missouri issued an injunction that allowed freezing Hydra’s assets and transactions. It also should be investigated whether other unlawful activity has been conducted by the defendant.
The CFPB requested the court to appoint hearing about advance interdict and to defer the verdict to complete explanation of the circumstances.
Even if you succeed to get a payday loan through online operator you risk getting worst unwitting financial after-effects because of sharing personal sensitive financial information as it is used to make a business. Such information may be used in several ways. Offenders may exercise identity theft, sell you products that you didn’t order, and charge unauthorized fees.
The Federal Trade Commission provides consumers with up-to-date information regarding online payday lenders which can be found at any time over the Internet. The Department of Commerce and Office of Consumer Protection may also be contacted in case of questions concerning online loans.
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