SSM Group, Hydra Financial Limited Fund, CMG Group, LLC, DJR Group, LLC, BCD Group, LLC, et al.
The Bureau of Consumer Financial Protection (Bureau) took action in federal district court to halt the operations of an online payday lender, the Hydra Group. Defendants included Richard Moseley, Sr., Richard Moseley, Jr., and 20 interrelated corporate entities controlled by Moseley, Sr. and Moseley, Jr. The Bureau alleged that the defendants obtained consumers’ sensitive personal and financial information from third-party data brokers, and used that information to access consumers’ bank accounts without authorization. According to the Bureau’s complaint, the Hydra Group deposited loans in consumers’ bank accounts, then debited biweekly "finance charges” indefinitely. In many cases, the Bureau alleged, consumers never saw loan agreements and were not aware of the account activity until after the loan was deposited and finance charges were withdrawn. Additionally, the Bureau alleged that, even when consumers did receive loan documents, the written disclosures misrepresented the price terms and repayment obligations of the purported loan. The Bureau alleged violations of the Consumer Financial Protection Act and other federal consumer financial laws.
A federal district court in the Western District of Missouri entered two orders effectuating settlements between the Bureau and the defendants. Under the terms of the settlements, the defendants are banned from the industry and forfeit approximately $14 million in assets. One of the orders also imposes a judgment for $69 million for purposes of paying consumer redress, but, in light of the defendants’ limited ability to pay, the judgment is suspended upon compliance with other requirements.