The Business of Lending Money: Tricks & Scams Just Plain Stupid!

By Jer Ayles. Attention payday, car title, signature, student, line-of-credit and yes, even Bitcoin lenders!

Do not play games with the FTC! They are “dialing for dollars.”

Opportunities to help US consumers abound! Consider just this one telling statistic: “About 46 percent of Americans said they did not have enough money to cover a $400 emergency expense. Instead, they would have to put it on a credit card and pay it off over time, borrow from friends or family, or simply not cover it at all.”

So… demand for our loan products continues unabated! However, that’s not an excuse for us to get sloppy with our marketing, customer on-boarding or transparency and disclosures.

This may be a new year BUT there still remains a lot of “cowboys” in our vertical that don’t have a clue about the risks they’re exposing themselves to when they screw with the FED’s.

Sure, the CFPB is unraveling thanks to President Trump. And as a result, all of us – including bankers and wall street – are getting some well deserved breathing room. Turns out a little less regulation has proven to give our economy a big kick in the pants; up she goes!

Still, the stupid stuff being done by a small group of knuckleheads in our industry continues. Here are links to just a couple of boners…

Fake payday loan debt: Link
$1.3B Fine against payday loan lender: Link
Lead generator fined $21M: Link
Think Finance debt collection fakes: Link
There are OH SO MANY MORE…

FTC staff are on an hourly hunt for lenders and a multitude of other industry players who make offers on their websites that cause consumer misunderstandings and products that default to a consumer “opt-in” while failing to disclose fees and ongoing relationships.

The FTC matter referenced below came to light in 2009. However, the supposed violations occurred back in 2006 & 2007. Imagine? Some tactic your company employed more than 10 years ago comes back to haunt you?

So… you MAY BE getting away with your tricks and scams today, but does what you’re doing pass what I call in our training materials, “the sleep test?”

Do you really want to do crazy stuff today only to pay big time – a la Scott Tucker – tomorrow?

DON’T think lender website violations are no longer taking place. I see it every day as I put on my consulting cap and advise my clients while reviewing their marketing and website IP.

And if anything, the FTC, CFPB and every other government acronym out there CONTINUES to scrutinize your lead generation and lending website for deficiencies that will result in your paying a large fine to the agency in order to avoid litigation; even when you are not breaking any laws. It’s often cheaper in the long run to just pay off the regulators than to fight them; even if they’re wrong about you!

Avoid trick tactics that force consumers into your products and services that do not CLEARLY and CONSPICUOUSLY disclose all fees, recurring charges, APR’s… and related products designed to appear to be free to the consumer but in actuality result in a payment of some kind by the consumer.

This best practice also applies to any partnerships/collaborations you enter into when your goal is to capture consumer personal data for later resale to a lead generator or other consumer service provider.

Look! Just play it straight!! Don’t do crazy stuff!!! Again, THERE IS NO NEED!

Don’t attempt to trick consumers into anything that fails to pass the sniff test. You don’t have to. If you’ve been reading my ramblings for ANY length of time, YOU KNOW that the last FDIC study revealed 52% of US households cannot get their hands on $400 cash in a pinch! Yeah, I know that sounds NUTS but it’s true!!

So… you can be the lender! Disclose EVERYTHING. Make it simple and clear to every potential borrower exactly what you offer and how much it costs.

Your BEST tactic for building a successful consumer loan business is to provide OUTSTANDING 100% service focused on your CUSTOMER! There is ZERO need for you to hide ANYTHING!

PLUS, YOU’LL SLEEP AT NIGHT! And, that is worth a lot of $$$$$. Just ask Scott Tucker…

Oh, and by the way! Don’t trust your attorney!! Question everything. Record everything. Get it ALL in writing. Get a second and third opinion. Google “Cash Call” for examples. While were at it, don’t trust your consultant either 🙂

Now, read the FTC inquiry below and smile if you are not currently a target.