This month the Consumer Financial Protection Bureau (CFPB) reached a settlement for online payday loan case with defendants Richard Moseley, Sr. and, Richard Moseley, Jr., owners of Hydra Group and 20 subsidiary companies. In November 2017 Moseley, Sr. was found guilty for conspiracy to collect unlawful debts, to commit wire fraud, identity theft, and “making false disclosures under the Truth in Lending Act. Moseley.” The CFPB filed a complaint against the defendants for unlawfully originating and servicing short-term online loans,
“The Bureau’s Complaint alleged violations of the Consumer Financial Protection Act and other federal consumer financial laws. The Bureau alleged that the defendants obtained consumers’ sensitive personal and financial information from third-party data brokers, and used that information to access consumers’ bank accounts without authorization. According to the Bureau’s complaint, the Hydra Group deposited loans in consumers’ bank accounts, then debited biweekly “finance charges” indefinitely. In many cases, the Bureau alleged, consumers never saw loan agreements and were not aware of the account activity until after the loan was deposited and finance charges were withdrawn. Additionally, the Bureau alleged that, even when consumers did receive loan documents, the written disclosures misrepresented the price terms and repayment obligations of the purported loan.”
The Court order charged a monetary penalty $69 million in restitution, but not being able to pay the amount will be suspended upon compliance with the order,
I. PERMANENT BAN ON ORIGINATING, OFFERING, SERVICING, COLLECTING OR SELLING LOANS OR OTHER EXTENSIONS OF CREDIT
II. PROHIBITED CONDUCT RELATING TO CONSUMER FINANCIAL PRODUCTS OR SERVICES
III. CERTAIN CONSUMER DEBTS EXTINGUISHED
IV. COOPERATION WITH BUREAU COUNSEL IT IS FURTHER ORDERED
V. PROHIBITION ON DISCLOSING CUSTOMER INFORMATION
IT IS FURTHER ORDERED
The entire consent order and details can be found at the CFPB website here.
The Defendants are banned from the debt relief industry, soliciting debt or advertising debt relief services. Additionally, all consumer debt related to loans originated by the Defendants during the relevant time period is extinguished. Lastly, Defendants must cooperate with the CFPB and meet reporting requirements of business activities through a designated person within 30 days of effective date.