Payday Loan Network sold information to scammers – Krebs on Security

The Federal Trade Commission announced this week that it is suing a consumer data broker who sold payday loan application data to scammers who used the information to withdraw money from consumers’ bank accounts. The scam brings to mind a clandestine identity theft service I wrote in 2012 that I was collecting your data from a network of payday loan sites. sold sensitive data taken from payday loan networks.

According to the FTC complaint, the data broker LeapLab he bought payday loan applications from financially distressed consumers and then sold that information to marketers he knew had no legitimate need for it. “At least one of those marketers Ideal financial solutions – a defendant in another FTC case – allegedly used the information to withdraw millions of dollars from consumers’ accounts without their authorization, ”the FTC said.

The FTC accuses the defendants that they sold approximately five percent of these loan applications to online lenders, who paid them between $ 10 and $ 150 per lead. But the defendants also allegedly sold the remaining 95 percent for approximately $ 0.50 each to third parties who were not online lenders and did not have a legitimate need for this financial information.

In September 2012, I posted a blog post on “Usearching[dot]info, ”A now-defunct identity theft service that offered the ability to purchase personal information on countless Americans, including social security number, mother’s maiden name, date of birth, email address, and home address. physical as well as driver’s license data for approximately 75 million citizens of Florida, Idaho, Iowa, Minnesota, Mississippi, Ohio, Texas, and Wisconsin.

That story pointed out that Usearching[dot]info also included data that appeared to come from another source: more than 330,000 consumer bank account records pulled from an archipelago of satellite websites that negotiate with a variety of lenders to offer payday loans. From that piece:

“I first began to suspect that the information came from loan sites when I took a look at the data fields available in each record. A trustworthy source opened and funded an account on and purchased 80 of these records, at a total cost of about $ 20. Each includes the following information: registration number, date the record was acquired, application status ( rejected / approved / pending), applicant’s name, email address, physical address, phone number, social security number, date of birth, bank name, account and routing number, employer name and the amount of time at current job. These records are sold in bulk, with prices per record ranging from 16 to 25 cents, depending on volume. “

“But it wasn’t until I started calling the people in the records that a clearer picture began to emerge. I spoke with over a dozen people whose data was being sold and found that they had all applied for payday loans on or around the date in their respective records. The problem was, all the records my source obtained were dated October 2011, and hardly anyone I spoke to could remember the name of the site they had used to apply for the loan. However, they all said they had initially provided their information to one site and were later redirected to several different payday loan options. “

I have no idea if LeapLab sold information to this identity theft service or if Ideal Financial was a Usearching customer.[dot]info. LeapLab is no longer in business and Ideal’s assets are frozen and in suspension of payments. But it’s clear that Ideal obtained consumer data from multiple sources: The FTC says LeapLab provided Ideal Financial with financial account information for only about 16 percent of Ideal Financial victims.

In this, as with so many financial scams, the people least able to afford it are scammed and scammed. The FTC accuses Ideal Financial of having purchased information from at least 2.2 million consumers from data brokers and used it to generate more than $ 43 million in unauthorized debits and charges for alleged financial products that consumers never purchased. Unfortunately, these “financial products” were primarily about how consumers could better manage their money or get out of debt.

This scam is also a reminder of how criminals steal millions with small chargesAll done through a vast network of fake company websites that look like established companies with legitimate products. Additionally, these types of micro-payment schemes are more common around the holidays, so now is a good time for readers to take a closer look at their bank and credit card statements for unauthorized charges.

A network of shell companies, according to the FTC, was created to launder stolen funds for Ideal Financial Solutions.

A network of shell companies, according to the FTC, was created to launder stolen funds for Ideal Financial Solutions.

A copy of the FTC civil complaint against LeapLab is included. here (PDF). It is also interesting to read are exhibits in the case (both PDF).

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