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CFPB settles with payday lender

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CFPB settles with payday lender

The Consumer Financial Protection Bureau has issued a consent order against Richard Moseley Sr., Richard Moseley Jr. and 20 interrelated companies to settle a complaint about the unlawful origination and servicing of short-term, small-dollar online loans.

The CFPB said the father and son obtained consumers' sensitive personal and financial information from third-party data brokers and used that information to access their bank accounts without their permission. The Hydra Group deposited loans into their bank accounts, and would then withdraw biweekly finance charges indefinitely. For the consumers that saw the loan terms, the written terms made misrepresentations.

A complaint was filed in 2016 and a year after, Moseley Sr. was found guilty of several charges, including unlawful debt, wire fraud and aggravated identity theft, among others.

The defendants were fined about $69.6 million, but due to their "limited ability to pay," the penalty was reduced to $1. The defendants will also forfeit $14 million in assets and will be banned from the payday loan industry.