FTC: Payday lender tried garnishing wages on unpaid 860% interest loans

FTC: Payday lender tried garnishing wages on unpaid 860% interest loans
FTC: Payday lender tried garnishing wages on unpaid 860% interest loans

A payday lender that charged 860% interest on loans and tried to get borrowers to accept wage garnishment if they couldn't pay them back has settled a Federal Trade Commision lawsuit.

The FTC sued Ecash and GeteCash in March, accusing the Utah-based company of requiring online loan applicants to check a box agreeing to loan terms that included an inconspicuous statement saying wages will be garnished -- removed involuntarily from paychecks. Only federal agencies have the right to garnish employee wages without a court order if the government is owed money.

Aware of the law, GeteCash, calling itself LoanPointe LLC, tried to assert the same collection rights as the government in letters to employers, the complaint says. The loans were for less than $1,000.