FTC Charges Payday Lender With ‘Deceptively’ Overcharging Clients


After a payday lender allegedly left consumers to pay more than promised by drawing continued interest-only deductions, the Federal Trade Commission (FTC) has charged a lending operation with overcharging customers and taking money from their bank accounts without authorization. At the agency’s request, a federal court has entered a temporary restraining order stopping the operation and freezing the assets of the defendant per an announcement.

The defendants, which ran with the names of Harvest Moon Financial, Green Stream Lending and Gentle Breeze Online, allegedly utilized deceitful marketing techniques to make consumers believe their loans would be paid back in a fixed number of payments.

The FTC alleges that, in many cases, consumers discovered that long after the promised number of payments had occurred that the defendants applied their money to only finance charges and kept making “regular finance-charge only withdrawals from their checking accounts.”

The agency also contends that the defendants did not make the loan disclosures they were mandated to provide, conducted recurring withdrawals from the bank accounts of consumers without correct permission, and “illegally” utilized checks created remotely. It charges the defendants with going against the Telemarketing Sales Rule, the FTC Act, the Electronic Funds Transfer Act and Regulation E, and the Truth in Lending Act and Regulation Z.

The defendants named in the matter include Camel Coins, Inc.; Lead Express, Inc.; Sea Mirror, Inc; Naito Corp.; La Posta Tribal Lending Enterprise; Ebisu Marketing, Inc.; Hotei Marketing, Inc.; Kotobuki Marketing, Inc.; Daikoku Marketing, Inc.; Keishi Ikeda; and Takehisa Naito.

FTC Bureau of Consumer Protection Director Andrew Smith said in the announcement, “Harvest Moon bled consumers dry, by promising a single payment payday loan, but then automatically debiting consumers’ bank accounts for finance charges every two weeks, in perpetuity.”

The U.S. District Court for the District of Nevada entered the temporary restraining order on May 19, and the commission vote giving staff permission to file the complaint was 5-0, according to the announcement.