Consumer agency sues lead aggregator for steering consumers to bad loans

An online lead aggregator is being sued for steering consumers to lenders who offered illegal or unlicensed loans that weren’t valid in the consumer’s state.

Zero Parallel sold consumers’ payday and installment loan applications to lenders it knew were likely to make void loans that the lenders had no legal right to collect, the Consumer Financial Protection Bureau said Wednesday. The bureau also submitted a proposed order in a separate case that would resolve a pending lawsuit against Zero Parallel’s owner, Davit Gasparyan, for engaging in similarly illegal conduct at his prior company, T3Leads.

The bureau ordered Zero Parallel to end its illegal conduct and pay a $100,000 penalty. The proposed order against Gasparyan would prohibit him from engaging in the same abusive practice and require him to pay a $250,000 penalty.

 “Zero Parallel steered consumers toward payday and installment loans that were a bad deal,” said Richard Cordray, director of the bureau.

Lead aggregators buy consumer information – called leads – from lead generators who operate websites that market payday and installment loans. Lead aggregators sell those leads to purchasers, typically payday or installment lenders. Consumers who applied for loans through Zero Parallel’s network had no control over which lenders received their applications. Zero Parallel regularly sold leads for consumers located in states where the resulting loan was void. 

The bureau found that Zero Parallel committed an abusive practice by selling loan applications to lenders in a way that prevented consumers from understanding the risks, costs, or conditions of the loans they were offered.

Related articles

EPA launches first limits on U.S. carbon emissions

Recall of the Week: Chrysler vehicles due to hacking vulnerabilities

Why hospitals are making patients sicker