Tuesday, September 6, 2011
The Federal Trade Commission is returning approximately $1.9 million to consumers who apparently were tricked into buying prepaid debit cards when they filled out payday loan applications online. In the scheme, payday loan applicants unknowingly were charged up to $54.95 per application for unrelated prepaid debit cards with zero balances, the FTC said.
The FTC alleges that Palo Alto, Calif.-based payday loan marketer Swish Marketing Inc. worked with San Clemente, Calif.-based debit card provider VirtualWorks LLC to design the payday loan application form that, when filled out on various websites, duped applicants into signing up for Visa Inc. and MasterCard Worldwide-branded prepaid debit cards. The FTC settled with the companies in August 2009.
The FTC is mailing over 110,000 refund checks to affected consumers. The average check is in the amount of between $10 to $15.
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