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Payday Loan Data Auctioned Off

FINANCIAL PRIVACY—U.S.

June 11, 2012

As the businesses offering short-term, high-interest loans, known as payday loans, move online, applicants are offering personal data--including bank account numbers--to lead-generation companies that then auction the data off to potential lenders, reports Bloomberg. Richard Cordray, director of the Consumer Financial Protection Bureau, is concerned that the highest bidder may be "a fraudster that has enough of the consumer's sensitive financial information to make unauthorized withdrawals from their bank account." A spokesman from the parent company of MoneyMutual.com, a prominent lead-generation company, says the industry is regulating itself and government regulation is unnecessary, but the report states Sen. Jeff Merkley (D-OR) disagrees and is preparing a bill to outlaw online lead generation.
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