Alternative Finances

FTC: Data Broker Sold Payday Loan Data To Scammers For 50 Cents Per Victim

A data broker who helped scammers steal millions of dollars from payday loan applicants is the target of a lawsuit filed last week by the Federal Trade Commission.

Data broker LeapLab bought hundreds of thousands of payday loan applications of financially strapped consumers, then sold that information to marketers whom LeapLab knew had no legitimate need for it. At least one of those marketers, Ideal Financial Solutions, allegedly used the data, which included Social Security and bank account numbers, to withdraw millions of dollars from consumers’ bank accounts without authorization.

Ideal Financial is a defendant in another FTC case, where it is accused of charging consumers for purported financial products that the consumers never purchased. LeapLab allegedly sold 95 percent of the loan applications it acquired -- which also included the consumer's name, address, phone number and employer -- for 50 cents each to scammers including Ideal.

LeapLab sold the remaining 5 percent of the loan applications to actual online lenders, who paid between $10 and $150 per lead.

The FTC's complaint also notes that LeapLab hired a key executive from Ideal Financial as its own Chief Marketing Officer and should have known that Ideal used the information to make unauthorized debits. Yet the defendants continued to sell the information to Ideal, according to the complaint, which accuses LeapLab of violating the FTC Act's prohibition on unfair practices.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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