Montel Williams-backed payday loan advertiser fined $2.1 million

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Payday lenders got another black eye after New York’s top regulator fined a widely advertised site for marketing illegal high-interest loans.

The rule with Selling Source, whose ads for his payday lead generation site Money Mutual talk show host Montel Williams include a $2.1 million fine and an agreement to add a disclaimer. responsibility on its national advertisements aired in New York indicating that the service is not available in the state. The company and Williams will be prohibited from making any new New York-specific advertisements that violate state usury laws.

However, ads will continue to run in other states.

“Using Mr. Williams’ reputation as a trusted celebrity endorser, MoneyMutual marketed loans to distressed consumers with exorbitant interest rates – sometimes over 1,300% – that trapped New Yorkers in destructive debt cycles,” Benjamin M. Lawsky, Superintendent of Financial Services, said in a statement.

A screenshot from MoneyMutual.com featuring celebrity endorser Montel Williams.MoneyMutual.com

“The New York State Department of Financial Services ‘has found no violation of law by Mr. Williams, and the agreement does not require him to pay any fines or penalties,'” said Jonathan Franks, spokesperson for Mr. Williams, in a written statement. “Mr. Williams and his team cooperated fully with the DFS throughout the investigation.”

MoneyMutual customers are “informed” and “make their own decisions” about the loans they choose through the site, Money Mutual spokesman Charles Goodyear said in a statement.

“Hundreds of thousands of consumers have been matched with a responsible lender, secured the short-term financing they needed, and repaid the money loaned to them,” he said.

New York is the latest to take action against SellingSource as regulators and watchdogs step up scrutiny of payday loans. The Consumer Financial Protection Bureau has included the company in its recent survey of the payday loan industry. Pennsylvania and Illinois sued the company last year for generating leads for loans that violated state loan laws.

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