On September 5, the Consumer Financial Protection Bureau signed a consent order against payday and installment loan company Zero Parallel LLC and its president and primary owner for acts the CFPB alleged were unfair, deceptive, and abusive. The order concludes the matter initiated by a complaint filed against the owner of Zero Parallel and another of his entities on July 8, 2016.
According to the CFPB, Zero Parallel receives leads from consumers looking for quick, small-dollar installment loans, commonly referred to as “payday loans”, and sells those leads to lenders and remarketing companies. According to the CFPB, consumers interested in obtaining such loans would enter their personal information into a form on the company’s website. Zero Parallel would then sell the consumers’ information to various lenders who would contact the consumers to provide and/or service the loan.
The CFPB alleged that, because it was collecting consumers’ information, Zero Parallel knew that certain consumers lived in states where loans of this type were prohibited. It alleged that despite that knowledge, Zero Parallel would nonetheless connect lenders with consumers in those states. The CFPB also alleged that after the consumers submitted their information, they would not be able to choose their lender and would not be given information about the lender providing the loan.
Under the terms of the order, Zero Parallel will pay a $100,000 penalty and has agreed to take “reasonable efforts” to ensure it only matches consumers with lenders that are permitted to offer loans in the states where those consumers live. The owner of Zero Parallel will pay $250,000, although he did not admit or deny the allegations in the complaint.
In July 2016, a similar complaint was filed against Davit (a/k/a “David”) Gasparyan for his actions at T3Leads, another payday loan lead aggregator, for violations of the Consumer Financial Protection Act.