Federal Trade Commission busts payday loan 'queenpin' Lisa Jeter

photo Developing Story

The Federal Trade Commission has sued a handful of payday loan collection agencies for practices that the agency says are in violation of the law. The businesses, based in Atlanta and Cleveland, Ohio, used intimidation and misleading information to trick consumers into paying debts they did not owe, the FTC said in its complaint.

Though legally separate, the companies have operated a common enterprise since 2009 to prey on consumers who had previously inquired about, applied for or received payday loans from online lenders, the FTC alleged.

Gregory Ash, senior staff attorney for the FTC's bureau of consumer protection, called defendant Lisa Jeter the "queenpin" of the project, which included a network of Post Office boxes and "bogus" company names. Ash and fellow investigators are still working to determine where the alleged lawbreakers got consumers' contact info, whether it was obtained from a actual payday lender or somehow stolen.

"We are confident they were not contingency collectors," Ash said. "Based on our interviews with consumers, we don't believe they were legitimate holders of the debt."

Pre-recorded messages misled customers, telling them that they were delinquent on their payments, that complaints had been filed against them in court, and they had only a few days to oppose the matter. The supposed debt collectors made harassing phone calls to victims at work, or repeatedly contacted family members, sometimes as often as three times per day. In fact, no lawsuit had been filed, and many victims who paid their "debts" later found out that they never had any debts in the first place, or that their debts had already been paid.

"Since at least September 2009, defendants have collected and processed millions of dollars in payments for debts that consumers do not owe or that defendants have no authority to collect," the FTC wrote in its complaint.

Ash says the best defense against a predatory debt collector is to get educated.

"Knowing what your rights are as a debtor and a consumer is important," he said. The best way to stop fraud is to educate consumers so they don't become a victim of it in the first place."

The agency makes information on the rights of debtors available at consumer.ftc.gov.

Contact Ellis Smith at esmith@timesfreepress.com or at 757-6315