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A $2.1 MILLION PENALTY AND an agreement to cease using a famous face as an endorser are the latest blows struck against the payday lending industry in New York state.
Selling Source LLC, a Nevada-based company that does business as MoneyMutual, along with celebrity endorser Montel Williams, agreed to a consent order including the $2.1 million penalty to settle charges from the New York State Department of Financial Services. The charges alleged that Selling Source sold payday lenders sales leads for more than 800,000 New Yorkers. The lenders then made loans to those New York residents with interest rates far above those allowed by state law, according to the state agency.
The sanctions against Selling Source are the result of the first successful enforcement action against a lead-generation firm. Lead-generation firms do not typically make payday loans directly, but instead set up websites marketing those illegal loans, according to the Department of Financial Services. Through promises of easy access to quick cash, the lead-generation companies entice consumers to provide them...