By Michael Virtanen
ALBANY, NY (AP) --An online company is losing Montel Williams as its celebrity pitchman in New York while agreeing to stop generating leads in the state for payday loans with interest rates sometimes topping 1,000 percent, regulators said Tuesday.
An investigation found Las Vegas-based Selling Source LLC, doing business as MoneyMutual, marketed illegal loans online to New York residents, and the company will pay $2.1 million in penalties, the Department of Financial Services said.
Williams, a former Marine who hosted "The Montel Williams Show" for more than a decade, signed a consent order saying he'll stop endorsing MoneyMutual loans in New York, it said.
"Using Mr. Williams's reputation as a trusted celebrity endorser, MoneyMutual marketed loans to struggling consumers with sky-high interest rates — sometimes in excess of 1,300 percent — that trapped New Yorkers in destructive cycles of debt," department Superintendent Ben Lawsky said in a statement. "The company made special efforts to target the more than 55 percent of their customers who were 'repeat clients' — including so-called 'Gold' customers who took out a new loan to pay off a previous loan."
A payday loan is a short-term advance against a borrower's paycheck and usually carries a high interest rate. New York's interest rate limit is 16 percent.
The consent order, also signed Monday by Selling Source CEO Glenn McKay, said the company acknowledged on its website that the typical annual percentage rate on a 14-day loan is "somewhere between 261 percent and 1,304 percent."
The order noted Selling Source had since September 2009 sold to its network of at least 60 payday lenders more than 800,000 New York consumer leads. It said each lender paid Selling Source a fee for every lead it bought and Selling Source in turn paid Williams a fee for every lead it sold through the MoneyMutual brand.
There were "numerous complaints from aggrieved New York consumers struggling under the rates, fees, and repayment schedules demanded by MoneyMutual's network of lenders," it said.
The investigation found no violation of law by Williams, who had no role in the business operations of Selling Source, his spokesman Jonathan Franks said. They "stand by his overall endorsement of MoneyMutual," with the exception of New York, and note he has received fewer than 10 complaints directly from consumers, Franks said.
He said many consumers have no access to traditional credit products, something industry detractors don't understand.
"As he has said publicly many times, Mr. Williams himself utilized short-term lending while attending the Naval Academy on more than one occasion and paid those loans back on time," Franks said.
The settlement, which precludes what could have been costly litigation, includes no admission of wrongdoing by Selling Source, the company said.
"Hundreds of thousands of consumers have been paired with a responsible lender, have secured the short-term financing they needed and repaid the money loaned to them," it said.
The consent order requires the company, which said it cooperated with regulators, to pay three installments of $700,000 over three years and disable its website from accepting applications from people who enter New York ZIP codes. The company agreed to state in ads that services aren't available in New York.
South Korea fines Meta $15 million for illegally collecting information on Facebook users
South Korea's privacy watchdog on Tuesday fined social media company Meta 21.6 billion won ($15 million) for illegally collecting sensitive personal information from Facebook users, including data about their political views and sexual orientation, and sharing it with thousands of advertisers.
It was the latest in a series of penalties against Meta by South Korean authorities in recent years as they increase their scrutiny of how the company, which also owns Instagram and WhatsApp, handles private information.
Following a four-year investigation, South Korea's Personal Information Protection Commission concluded that Meta unlawfully collected sensitive information about around 980,000 Facebook users, including their religion, political views and whether they were in same-sex unions, from July 2018 to March 2022.
It said the company shared the data with around 4,000 advertisers.
South Korea's privacy law provides strict protection for information related to personal beliefs, political views and sexual behavior, and bars companies from processing or using such data without the specific consent of the person involved.
The commission said Meta amassed sensitive information by analyzing the pages the Facebook users liked or the advertisements they clicked on.
The company categorized ads to identify users interested in themes such as specific religions, same-sex and transgender issues, and issues related to North Korean escapees, said Lee Eun Jung, a director at the commission who led the investigation on Meta.
"While Meta collected this sensitive information and used it for individualized services, they made only vague mentions of this use in their data policy and did not obtain specific consent," Lee said.
Lee... Read More