I recently wrote about stymieing debt collectors by controlling the personal information you give them. Saliently, a recent Consumer Financial Protection Bureau (CFPB) action demonstrates why debtors should be careful with what they tell creditors, especially online.
The action, situated in California federal district court, concerns the behaviors of what are called “lead aggregators.” “Leads,” in this case means potential sales opportunities. Web sites set up by installment or payday lenders (“lead generators”) asked consumers to input their personal information into applications for lending purposes. Given the shady practices of payday lenders, this should certainly appear to be a bad idea.
But it gets worse: The lead generators then sold the information to the lead aggregators, companies in the business of buying and selling personal information, which in turn resold it to other payday lenders and debt collectors. In many cases the lead aggregators did not honor the promises the lead generators made to consumers who filled out their applications to keep everything private. For example, consumers who supplied their “names, telephone numbers, home and email addresses, references, and employer information” did not receive the protections the lead generators promised them.
Some of the debt collectors that bought the leads from the lead aggregators engaged in fraudulent debt collection. They would operate their businesses outside the reaches from U.S. courts, such as foreign jurisdictions or even Indian reservations. One lead aggregator, Lead Publisher, sold as many as three million leads to companies sued by the CFPB for fraudulent debt collection practices in March 2015. These companies harassed consumers, demanding repayment for nonexistent debts, and threatened them with fake legal actions.
The CFPB alleges these companies collected millions of dollars from consumers thanks in part to the lead aggregators’ failure to investigate the debt collectors’ business practices or even whether they were properly licensed by state authorities.
The CFPB’s press release on its actions against the lead generators can be found here.
It’s discouraging when installment and payday lenders live up to their reputations by selling their information to unscrupulous businesses. It’s a clear example of why it’s so important to be careful with the information you give to creditors, especially ones that are online. Just because they claim to have a privacy policy doesn’t mean they will honor it. Rather than go to an installment or payday lender, talk to an experienced New York bankruptcy lawyer first.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy trustee Bruce Weiner for a free initial consultation.
