Senator Wants FTC to Probe Online Payday Lenders
Markey's Dec. 4 letter to FTC Chairwoman Helen Ramirez cited a report carried on NPR which related what happened when a reporter gave some of her information to a site and said she was looking for a short-term, small loan.
Within minutes, Markey wrote, the reporter was “bombarded” with offers from online payday lenders who had been given her information from the first site, a lead generation site.
“These business practices raise a number of concerns about what these lead generator websites do with consumers' personal information, whether they store and secure it and whether these websites sell this personal information without consumers' knowledge of consent,” the Massachusetts senator told the FTC.
The information collected include consumer's names and addresses, Markey wrote, but also Social Security numbers, banking account and routing numbers. The sites claim the information will be used to approve the loan, Markey alleged, but are not clear that the information will be shared with a large number of other organizations or lenders the consumers do not know.
Markey compared this practice with a similar letter that he wrote in 2012 about practices he alleged were being used by data brokers to gather consumers' personal information and then sell that information to other firms.
“I believe an investigation of this (payday lender) practice would fall within the FTC's mandate as stipulated in Section 5 of the Federal Trade Commission Act with respect to protecting Americans from 'unfair and deceptive acts or practices,’” Market’s letter said.