Payday Loan Company Dumps Consumer Financial Data in Dumpster Fined $101,500

By | Nov 7, 2012

'loan shark advertising on delivery truck' photo (c) 2009, Andrew Ciscel - license: http://creativecommons.org/licenses/by-sa/2.0/Don’t let this happen to you! Whether you’re offering payday loans, car title loans, small dollar loans, installment loans or any related products, make certain you have a consumer data protection strategy in place and that all your employees are on-board with it.

Here’s the story from the FTC Press Release…

“Companies that Own and Manage Payday Lending and Check Cashing Stores to Settle FTC Charges That They Tossed Sensitive Consumer Data into Trash Dumpsters Will Pay $101,500 Civil Penalty.”

The FTC charged that PLS Financial Services, Inc., and The Payday Loan Store of Illinois, Inc., failed to take reasonable measures to protect consumer information, resulting in the disposal of documents containing sensitive personal identifying information – including Social Security numbers, employment information, loan applications, bank account information, and credit reports – in unsecured dumpsters near several PLS Loan Stores or PLS Check Cashers locations.  PLS Group, Inc., which owns PLS Financial Services and The Payday Loan Store of Illinois, was also named in the complaint.

PLS Financial Services and The Payday Loan Store of Illinois violated the FTC’s Disposal Rule by failing to take reasonable steps to protect against unauthorized access to consumer information in the disposal of credit reports.  They also allegedly violated the Gramm-Leach-Bliley Safeguards Rule and Privacy Rule, which require financial institutions to develop and use safeguards to protect consumer information, and deliver privacy notices to consumers.  Further, the FTC charged that all three defendants violated the FTC Act by misrepresenting that they had implemented reasonable measures to protect sensitive consumer information.

According to the complaint filed by the FTC, this is the third time the FTC has charged a violation of the Disposal Rule, which requires that companies dispose of credit reports and information derived from them in a safe and secure manner.

According to the FTC complaint, PLS Group owns approximately two dozen operating companies, such as The Payday Loan Store of Illinois, that in turn own and operate more than 300 retail stores in nine states under the names PLS Loan Stores and PLS Check Cashers.  These stores offer a variety of products and services, including payday loans, check cashing, automobile title loans, debit cards, phone cards, and notary services.  PLS Financial Services provides management services to the PLS Loan Stores and PLS Check Cashers locations, including establishing their policies and procedures for the handling and disposal of consumer financial information.

The Commission vote to approve the proposed consent decree was 5-0.  The Department of Justice filed the proposed consent decree on behalf of the Commission in the U.S. District Court for the Northern District of Illinois.  It was signed by the judge and entered by the court on November 1, 2012.

Read the original FTC Press Release against PLS Group and their affiliates here. Folks (as President Obama would say), this is a situation that you simply do not need to experience in your business. There are already compliance and licensing challenges to deal with. Put this issue to bed immediately.

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2 Comments so far
  1. Suki November 7, 2012 1:47 pm

    This development shocks me. I know PLS. They are an extremely well run company. I would love to know the “real” story. This does not represent the expertise PLS brings to our space.

    Suki

  2. Payday Loan Industry November 7, 2012 1:48 pm

    I agree 100% with your comments, Suko. I’ve met these guys at CFSA and FISCA. Something broke down…

    Jer – Trihouse

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