SAN FRANCISCO (MarketWatch) – Famous spokesperson Montel Williams will no longer be able to help cash-strapped New York residents find a payday lender.
Under a consent order, Selling Source, which operates as Money Mutual, will have to pay a fine of $ 2.1 million and ensure that it no longer collects information about New -Yorkis for the purpose of generating leads for payday loans, which are illegal under state law. Selling Source and Money Mutual do not do payday loans, but direct business to these lenders.
In addition, the consent order states that “Williams undertakes to cooperate with the [New York State] department [of Financial Services] taking all commercially reasonable steps to ensure that Selling Source and its affiliates comply with these and all other terms of this Consent Order.
Jonathan Franks, a spokesperson for Williams, said in a statement that Williams had cooperated with the DFS throughout their investigation.
“The DFS has not found any violation of the law by Mr. Williams, and the agreement does not require him to pay fines or penalties,” Franks said. “As is typical of a sponsorship deal, Mr. Williams has no role in the business operations of Selling Source, and his role is limited to that of a famous sponsor.”
In a statement, Selling Source said the settlement did not include any admission of wrongdoing and that Money Mutual voluntarily stopped accepting information from New York State residents in November 2013. Selling Source said that ‘She would revise her ad to make it clear that her services are not available to New York State residents.
The terms of the order require Selling Source to no longer advertise New York zip codes, IP addresses or phone numbers, and to display “clearly and visibly” on the Money Mutual website that ” This service is not available in New York or New York. York borrowers due to interest rate limits under New York law. The company has 90 days to comply.
If someone using a New York state zip code tries to use Money Mutual’s website, the company is required to redirect them to a DFS website to prevent predatory lending, according to the consent order. .
It’s not just New York that has cracked down on payday lenders and the businesses that generate leads for them. In April, Illinois Attorney General Lisa Madigan filed a lawsuit against Money Mutual for generating leads with payday lenders.
Last year, the Consumer Financial Protection Bureau released a report finding that 80% of payday loans were rolled over or renewed within 14 days, resulting in fees that far exceeded the loan amount. In January, the CFPB said it was looking for ways to regulate the $ 46 billion payday loan industry at the federal level.
Recently, John Oliver of HBO’s “Last Week Tonight” delivered a 16-minute rant against the industry.
