On November 7, 2012, the Federal Trade Commission announced that it had settled charges against payday lending and check cashing companies alleged to have improperly disposed of consumers’ personal information. In its complaint, the FTC maintained that PLS Financial Services, Inc., and The Payday Loan Store of Illinois violated the FTC’s Disposal Rule as well as the Gramm-Leach-Bliley Act’s Privacy Rule and Safeguards Rule by disposing of documents that contained consumers’ Social Security numbers, bank account numbers and credit reports in unsecured dumpsters near the companies’ payday lending and check cashing retail stores. The FTC also alleged that the companies violated the FTC Act by misrepresenting that they would reasonably protect consumer information.
In the settlement, the companies agreed to pay $101,500 and are enjoined from any future violations of the Disposal, Privacy and Safeguards Rules. The settlement also requires the companies to establish and implement a comprehensive information security program which will be assessed for compliance on a biannual basis for 20 years.
The FTC’s vote to approve the proposed consent decree was unanimous, and the decree was signed and entered by the U.S. District Court for the Northern District of Illinois on November 1, 2012.