CFPB Throws The Book At Payday Loan Aggregator

The Consumer Financial Protection Bureau said on Thursday (April 21) that it had taken action against the cofounding duo of a company that resold loan applications without taking security precautions.

As noted in a press release by the CFPB, complaints that were filed on Thursday in federal court said that Dmitry Fomichev and Davit Gasparyan created T3Leads and were lax in protecting consumer data.

That firm, according to the complaints, did not conduct due diligence in working with buyers and sellers. Regarding daily activities conducted by T3, lead aggregation was focused on activity that bought and sold installment loans. The leads themselves contained (and typically do contain) personal data, ranging from phone numbers to references and employer data.

Those leads also meant that consumers had no ultimate control over the way data flowed or how applications would be processed. The lead generator model, as employed by the T3Leads outfit, falsely claimed that its lenders met standards requirements, when, in fact, the opposite was true, the CFPB contended.

The business practice was such that T3 steered consumers’ toward unfavorable loans with higher interest rates in place. Adding fuel to the fire over margins and loan profiles, the CFPB stated that T3Leads bought the leads and then sold them to installment lenders or payday firms. The firm, according to CFPB, did not vet the purchasers.

In a statement that accompanied the release, Richard Cordray, the CFPB’s director, stated: “T3Leads steered consumers toward bad deals with lenders it didn’t vet and with no regard for how the consumers’ information would be used. This is a reminder to the middlemen who buy and sell consumer loan applications: If you engage in this type of conduct, you risk the consequences for harming people.”