FTC Warns of Bogus Payday Loan Debts
Troutman Sanders LLP
On March 21, the Federal Trade Commission issued a warning that portfolios of alleged payday loan debts serviced by AMG Services are bogus. The alleged lenders – USFastCash, 500FastCash, OneClickCash, Ameriloan, United Cash Loans, AdvantageCashServices, and StarCash Processing – never authorized, assigned, or sold any of their loans for third-party collection. Consumers may not even owe the alleged debts.
The FTC confirmed that these loans were a sham through the declaration of the former general counsel of AMG Services, Michael Jared Marsh. Marsh’s October 2015 declaration, signed in connection with a related FTC lawsuit, expressly stated that none of the aforementioned lenders ever sold any of their customer or account information or placed with or sold to any third party their charged-off accounts.
The FTC’s bulletin instructs companies that are in possession of one of these portfolios not to attempt to collect these debts or to try to sell the portfolios to anyone else. If the company defies such instruction, it may be in violation of either the Fair Debt Collection Practices Act (“FDCPA”) or the Federal Trade Commission Act (“FTCA”).