trade group for online payday lenders has started to
comb the Internet for sites making misleading claims,
part of an effort to clean up the reputation of an
industry beset by complaints from consumer groups and
Online Lenders Alliance, which represents short-term
lenders and the companies that steer customers to them,
started the new monitoring project after The Los Angeles
Times reported in May that many websites advertising
online loans say customers are not subject to a credit
check –– a claim that’s usually not true.
month, OLA hired an outside firm to build a program that
will search the Web for sites using the term "no
credit check." The group is now picking out sites
that are controlled by lenders or loan advertisers and
asking them to take down any "no credit check"
claims and fix other problems.
chief executive Lisa McGreevy said the group has done
similar monitoring work before, but only manually ––
typing various terms into Web searches, browsing sites
and looking for misleading language or other bad
is the first time that the group has tried a more
trying to be the cop on the beat," McGreevy said.
"We’re not interested in having bad actors or
people who do fraudulent business giving our good
lenders a bad name."
December, the federal Consumer Financial Protection
Bureau sued T3Leads, a California broker that sells
consumer loan inquiries to online lenders.
bureau alleged in the suit that T3Leads does not
properly monitor claims made by lead generators ––
sites that collect information from consumers looking
suit focused on advertisers’ claims about loan rates
and terms, which the bureau said can lure customers into
bad deals. But McGreevy said "no credit check"
claims are almost never true and that sites that make
them are helping perpetuate the notion that the industry
online payday lenders generally don’t pull full credit
reports from major credit bureaus, they will typically
use other methods that qualify as a credit check,
McGreevy said, making any "no credit check"
more, sites making that claim are likely to have other
sites have one thing wrong, they probably have other
things that are noncompliant," McGreevy said.
of this monitoring, she acknowledged, is work that
lenders should already be doing. It’s up to lenders,
she said, to make sure they’re buying customer
information from companies that follow the rules.
McGreevy said it’s difficult to stay ahead of sites
that can change from one minute to the next.
on top of it is a constant monitoring challenge,"
she said. "It takes every part of our industry to
look at what’s happening."
the trade group identifies a site making a "no
credit check" claim, she said OLA will look for
other language or site elements that go against the
group’s rules. For example, she said sites that
require customers to agree to something often include a
check box, but that shady sites will sometimes check
the group finds a site with problems, McGreevy said OLA
will send the site’s operators a notice, asking them
to fix problems. That goes for OLA members and
nonmembers alike, she said.
I find someone who is a bad actor, I will report them to
our members and to law enforcement and to regulators so
they cannot perpetrate their fraud," she said.
who don’t bring their sites into compliance could be
kicked out of the group, she said, while nonmembers
could lose business. If OLA believes that a loan
advertising site isn’t following the rules, the group’s
members –– including lenders and lead brokers, such
as T3Leads –– are not supposed to buy customer
information from those sites.
they do, it could lead to those lenders being booted
from the trade group or regulatory headaches such as the
kind of lawsuit now facing T3Leads.
estimates its members account for about 80 percent of
the nation’s small-dollar online lending volume.