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From Banking and Finance Law Daily, March 18, 2016

Payday loan lead generator must pay $1 million, damages to NY customers

By Colleen M. Svelnis, J.D.

New York Department of Financial Services has announced a settlement with Blue Global LLC, an online payday loan lead generator, for violations of New York law, under which the company must pay a $1 million penalty, cease payday loan lead generation activities in New York, and provide new consumer warnings and disclosures. The company’s Chief Executive Officer was personally found to be in violation of New York law under the Consent Order.

An investigation by the Department found that Blue Global misrepresented to New York customers and others the legal status of payday loans the company advertised primarily through websites, including 1OODayLoans.com. Additionally, the company misrepresented the safety and security of personal information that consumers entered on websites operated by Blue Global in violation of New York state law Financial Services Law Sec. 408. As a result, Blue Global’s New York customers’ personal information was available to persons who used it to attempt to commit fraud and harass consumers.

Under the agreement, Blue Global is also required to pay damages to any New York consumer who has suffered identity theft traceable to a data security breach of the company’s systems or to certain conduct by Blue Global and must adhere to data security measures to protect consumers’ personal information.

“DFS will not tolerate a marketer’s failure to protect consumers’ sensitive personal information,” said Acting DFS Superintendent Maria T. Vullo. Blue Global, an Arizona limited liability corporation, sold the leads consisting of sensitive personal information of approximately 180,000 New York consumers, and collected personal information from approximately 350,000 New York consumers, according to the Department.

Blue Global released a statement calling the agreement “in our company’s and our stakeholders’ best interests” and lauding the “satisfactory resolution” to the issue.

Unsecured customer information. Blue Global offered payday loans and other financial products and services on its websites. The company offered to sell or share leads consisting of consumers’ sensitive personal and financial information captured from their websites with buyers. The information includes any or all of the following: a person’s first and last name; address; Social Security number; date of birth; driver’s license number; bank account number; routing number; email address; and other information that may be used to identify an individual.

Blue Global’s online advertisements promised consumers that protecting consumers’ personal information was “at the top of our priority list” and that securing such information was “completely 24/7 guaranteed.” Contrary to these representations, the Department’s investigation revealed that Blue Global did not take any protective measures when sharing consumers’ sensitive information with third parties.

Companies: Blue Global LLC

MainStory: TopStory EnforcementActions IdentityTheft Loans Mortgages NewYorkNews Privacy StateBankingLaws UDAAP

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