Fintech Firm Shut Down And Fined By The FTC

A financial technology firm and its CEO have agreed to pay $104 million to resolve the FTC's allegation that they misled consumers into providing sensitive personal and financial information, which was later sold without ensuring compliance with the FTC Act. The company's business model involved generating loan "leads" through internet advertisements and offering those leads with the accompanying sensitive information to a sequential list of potential purchasers until the leads are sold. The fintech firm made no loans itself, yet several common consumer financial protection failures put it out of business.

According to the FTC allegation, the firm operated 38 websites where it promised to find lenders with favorable loan terms for the consumers. Through the websites, the firm lured consumers to provide their personal and financial information in loan applications which the defendants then sold as "leads" to anyone who was willing to pay for such information.