Consumer Bureau Action Tracker

CFPB – Integrity Advance, LLC


State

Nationwide

target

Integrity Advance, LLC, James R. Carnes (CEO)

Topics

Enforcement, Payday Loans

In 2015, the CFPB took action against “online payday lender” Integrity Advance, LLC and its CEO, James R. Carnes, for “allegedly deceiving consumers about the cost of short-term loans.” The CFPB alleged Integrity Advance “did not disclose the costs consumers would pay” and “unfairly used remotely created checks” to charge customers’ “bank accounts even after the consumers revoked authorization for automatic withdrawals.” Carnes appealed the administrative lawsuit that sought “$38.1 million in restitution” and civil penalties against him, and this case is still listed as active.

  • According to the CFPB, “the company offered loans ranging from $100 to $1,000, and consumers typically applied for the loans by entering their personal information into a lead generator website.” This process occurred from “May 2008 through December 2012.” [Jeff Blumenthal, “CFPB charges Delaware-based online lender with deceiving consumers about loan costs,” Philadelphia Business Journal, 11/19/15]
  • The “administrative lawsuit” alleged “that the contracts of Integrity Advance, run by CEO James R. Carnes, did not disclose the costs consumers would pay under the default terms of the contracts.” Additionally, it alleged that the “company ‘unfairly used remotely created checks to debit consumers’ bank accounts even after the consumers revoked authorization for automatic withdrawals.'” The terms of Integrity Advance’s contract stated that “loans would roll over four times — causing additional charges to accrue with each time — before the company applied any of the payments to the principal amounts. But the costs on the disclosures were based on the assumption that the loans would not roll over and would instead be repaid in full by the first payment.” The company “never informed consumers of the total costs of their loans if they were rolled over, even though the contracts were set up to roll over automatically,” resulting in “$765 in finance charges for a typical $300 loan.” [Jeff Blumenthal, “CFPB charges Delaware-based online lender with deceiving consumers about loan costs,” Philadelphia Business Journal, 11/19/15]
  • The company was also alleged to have “illegally forcing borrowers to agree to repay their loans through pre-authorized Automated Clearing House (ACH) payments. If a consumer canceled the authorization for ACH withdrawals, the lender would then use remotely created checks to continue debiting the account.” [Jeff Blumenthal, “CFPB charges Delaware-based online lender with deceiving consumers about loan costs,” Philadelphia Business Journal, 11/19/15]

Status

Inactive or Resolved


2015-CFPB-0029 11/18/2015 1/4/2017

CFPB Takes Action Against Online Lender for Deceiving Borrowers
http://www.consumerfinance.gov/policy-compliance/enforcement/actions/integrity-advance/

  • Consumer Financial Protection Bureau (CFPB)
  • Administrative filing
  • None
  • Nonbank
  • $43,500,000
  • Not Available

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