Headlines have been filled with the dubious practices of predatory lenders over the last several years. California consumers in need of additional funds may have found themselves in a precarious situation at the hands of two companies owned by the same man. The Federal Trade Commission (FTC) has fined LaPointe, LLC and Eastbrook, LLC for engaging in illegal wage garnishment and debt collection.

The two companies had a payday lending scheme in which customers saw a portion of their wages being held in order to pay off delinquent loans. Consumers applied for loans through the companies' websites and agreed to have a portion of their wages garnished by their employers, which was an illegal arrangement. Federal agencies are the only entities that can instruct employers to engage in wage garnishment.

In addition to being fined almost $300,000 for illegal lending practices, the two lending agencies and their owner have been forbidden from partaking in a variety of financial activities. Certainly, they will no longer be able to mislead customers on the conditions or amounts on any type of lending. In addition, the court ordered them to cease any wage garnishment activities. LaPointe and Eastbrook have been charged under the regulations put in place by the Truth in Lending Act.

Unfortunately, these types of schemes tend to target those in less than ideal financial positions. These companies, like others before them, knowingly deceived their customers, who were seeking financial help. Instead of receiving assistance, borrowers were illegally duped and unnecessarily lost wages as a result. Consumers have the right to receive accurate and honest information about the agreements they make. As such, we all deserve the protection necessary to prevent these incidents from happening to us or adequate compensation if they already have.

Source: The Association of Credit and Collection Professionals, "Court Orders Payday Lenders to Pay More Than $294,000," Jan. 9, 2012