eDebitPay LLC has been found in contempt of court and fined $3.7 million. A federal judge found that the company had violated the terms of a 2008 court order.
The 2008 order prohibited eDebitPay and its officers from making any misrepresentations or unauthorized debits and required them to pay more than $2.2 million to settle deceptive marketing charges.
The Federal Trade Commission (FTC) alleged that the defendants targeted consumers who were unemployed or had poor credit, selling a bogus “$10,000 credit line” that was really an online shopping club membership and a “no cost” prepaid debit card with hidden fees.
But in marketing the “$10,000 credit line,” the FTC alleged that the defendants violated the order and misrepresented that they were offering a general line of credit, when they were actually offering a shopping club membership with a credit line that could be used only to buy merchandise from the club.
Instead of clearly disclosing what they were actually selling, the defendants buried the truth in fine print, the FTC said. The FTC also charged the defendants with marketing a “no cost” prepaid debt card that carried a variety of fees they failed to disclose.
The court held the defendants in contempt of the 2008 order and imposed a $3.7 million judgment. The defendants have filed a notice of appeal of the order.