TongRo Images/Thinkstock(NEW YORK) — MoneyMutual will pay a $2.1 million penalty, the New York Department of Financial Services said Tuesday, in connection with the marketing of illegal online payday loans.
Montell Williams, who had endorsed the company, withdrew his endorsement Tuesday. “Using Mr. Williams’ reputation as a trusted celebrity endorser, MoneyMutual marketed loans to struggling consumers with sky-high interest rates,” NYDFS Superintendent Benjamin Lawsky said in a statement. Payday lending is illegal in the state of New York under both civil and criminal statutes, the agency statement noted.
The $2.1 million settlement is the first successful enforcement action against a payday loan “lead generation” company.
A spokesman for Williams said that there was no finding of a violation of the law on his client’s part. “Mr. Williams is not blind to the problems of the industry,” a statement read. “His endorsement of MoneyMutual is reflective of its efforts to lead the industry in self-regulation.”
“Naturally, we are deeply concerned any time a consumer reports an issue with any product or service with which [Williams] is associated and, as we always have, we will fully investigate and attempt to resolve any issue brought to our attention,” the statement concluded.
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