According to the New York Times, New York sent subpoenas to lead generator websites which sell sensitive customer information to payday lenders. The subpoenas seek information about the practices the lead generator uses and their connection to payday lenders. The move is to curb the online payday loan industry, an industry that offers short term loans with annual interest rates of more than 400%.
The lead generator websites are a critical link for payday lenders to new customers. At first glance, the lead generator websites appear to be online lenders, prompting customers to enter their private financial information in applications. These “leads” are then sold to payday lenders. With these leads, payday lenders can gain lucrative access to customers in various states and make loans that exceed state usury caps.
The state is also concerned that the leads will somehow end up in the hands of swindlers. According to state officials, the lead generator websites also pass customer information to other types of financial schemers.
If you are struggling to pay your basic living expenses, don’t use a payday loan under any circumstances. Instead, contact a debt settlement attorney who can help you get rid of excess bills without incurring the exorbitant interest rates of payday loans.