The owners and operators of a vast payday lending scheme that overcharged consumers millions of dollars will be permanently banned from the lending industry under the terms of a settlement with the Federal Trade Commission. The settlement also provides that nearly all outstanding debt—made up entirely of illegal finance charges—held by the company will be deemed as paid in full.
The scheme, which was operated online under the names Harvest Moon Financial, Gentle Breeze Online, and Green Stream Lending, used deceptive marketing to convince consumers that their loans would be repaid in a fixed number of payments. The FTC’s complaint alleged that the company instead continued to draw millions of dollars in payments from consumers’ bank accounts long after the loans’ original principal amount and stated repayment cost had been repaid, and would do so until consumers completely closed their bank accounts or found some other way to cut off payments.
“These defendants hoodwinked people in financial need by charging much more than promised for payday loans,” said Daniel Kaufman, Acting Director of the FTC’s Bureau of Consumer Protection. “We expect payday lenders to not only honor the terms of their deal, but also to refrain from making a never-ending series of unexpected withdrawals from customers’ bank accounts, as these companies did.”
Under the terms of the settlement, Takehisa Naito and Keishi Ikeda, along with their companies Lead Express, Inc.; Camel Coins, Inc.; Sea Mirror, Inc,; Naito Corp.; Kotobuki Marketing, Inc.; Ebisu Marketing, Inc.; Hotei Marketing, Inc.; and Daikoku Marketing, Inc. will be permanently prohibited from making loans or extending credit of any kind.
The settlement includes a monetary judgment of $114.3 million, which is partially suspended based on an inability to pay. The defendants will be required to turn over all corporate assets and almost all domestic personal assets along with a number of vehicles to a receiver. The receiver will wind down and liquidate the business and provide all proceeds to the FTC.
Any consumer loan made by the company before it was temporarily shut down as part of the case will be considered to be paid in full if the original amount of the loan and one finance charge have been paid. The settlement also prohibits the defendants from making any misrepresentations related to collecting on any debt, as well as prohibiting them from making unauthorized withdrawals from bank accounts.
If the defendants are found to have misrepresented their financial status, the full amount of the monetary judgment would be immediately due.
The FTC’s case against defendant La Posta Tribal Lending Enterprise will continue.
The Commission vote approving the stipulated final order was 5-0. The FTC filed the proposed order in the U.S. District Court for the District of Nevada.
NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.
The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.