Information Selling, Identity Theft and Payday Loan Scam Rumbled by Federal Trade Commission

The Federal Trade Commission has reported a new payday loan scam that has resulted in the dissolution of one of the largest known cases of illegally bought, sold and utilized consumer information know in U.S. history.

The FTC has closed down the operations of a group that perpetrated in excess of 2.7 million calls to 600,000 different phone numbers, collecting more than $5.2 million from unsuspecting consumers in bogus loan repayments.

Payday Loans Sites with Poor Security and Regard for Privacy are Targets

This now defunct criminal operation obtained personal details of consumers from a specialist website that deals in personal information. Sites such as populate their information banks with data from unsafe and insecure payday loans sites.

Be Aware of Information Selling Sites

On closer inspection, sites like will sell personal details to anyone with a few dollars to buy them. An undercover reportage team of security specialists from the Krebs on Security website posed as information dealers and were able to purchase 80 personal records for a paltry $20. As part of the investigation, the data that was bought from the information selling site included sensitive financial data and consumer activity on recent payday loans, such as:

  • An application number
  • Date of application
  • Status of application made (i.e. was the payday loan rejected, approved or pending)
  • Applicant’s name
  • Applicant’s email address
  • Applicant’s physical address
  • Social Security Number
  • Date of Birth
  • Bank Name
  • Account and routing number
  • Name of Employer
  • Length of time at current job

Staggeringly, these detailed and highly identifiable sets of information are sold in bulk and have per-record prices equal to as little as $0.16 to $0.25.

One victim of the scam reported that she received numerous phone calls from bogus collection agencies about payday loans that she applied for but did not take. Interestingly, the callers all had thick Indian accents and were posing as process servers in the State of Virginia or law enforcement officials. The tone of the phone calls was threatening and the callers tried to dupe the victims into verifying personal details such as bank account numbers.

Warning Signs

If you suspect that a phony collection agency is calling you, bear these tell-tale signs in mind that should ring alarm bells instantly:

  1. If the caller tries to collect payment for a loan you never had;
  2. If the caller will not divulge a mailing address or phone number;
  3. If the caller requests personal, financial or sensitive information;
  4. If the caller threatens to have you arrested or to report you to a law enforcement agency to pay.

Remember, that any issue to do with a loan is never a criminal matter so do not be intimidated by callers threatening you with arrest or similar. If you have a loan outstanding and it goes to legitimate collection, this is a matter for the civil courts if it indeed progresses that far.

What you should never do

  • Never confirm or volunteer any personal information to any company or business that calls you.
  • Ask for a secure callback number, the name of the person you are speaking to and stand your ground.
  • Do not take no for an answer!

What you should always do

  • Be discerning about using unknown payday loan sites online that have lax security – many sites cannot protect your details in the same way that will. We are certified McAfee Secure™ and SSL encrypted.
  • Always read a site’s privacy policy thoroughly before inputting any of your sensitive details into the site or application form.
  • has a strict and clear Privacy Policy that you should read and become familiar with to know that you information will be safe and never be sold to information dealers.
  • Finally, the most important step is to report the call to the Federal Trade Commission and your local State Legislature and Ombudsman!