Tags: Montel Williams | MoneyMutual | fined | loans | New York state

Company Montel Williams Pitches Fined Over 'Predatory' Loans

By    |   Thursday, 12 Mar 2015 05:15 PM

TV talk show host and pitchman Montel Williams' reputation has taken a hit over his celebrity endorsement of a payday loan company which the New York State Department of Financial Services (DFS) says charges exorbitant rates and provides loans which are illegal in the state.

MoneyMutual, which features television ads by Williams, has been forced to pay a $2.1 million fine for pushing the high-interest illegal loans, ABC News reports.

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Benjamin Lawsky, superintendent for financial services for New York State, told ABC, "They have interest rates that run from 200 percent to sometimes as high as 1,300 percent and that really puts people, when they take those loans, into a cycle of debt from which they can never emerge.

"Through the use of Mr. Williams' celebrity endorsement and through advertisement, they were basically marketing this as a safe product and it's simple and easy to pay back, and it's actually just the opposite."

Williams was blasted on Twitter for promoting "predatory" loans, and responded, "Get a grip on reality," ABC noted. Another Twitter user said, "You promote and endorse loan sharking."

Financial Juneteenth noted that New York State law forbids unlicensed lenders from charging interest above 16 percent per year and licensed lenders from charging above 25 percent per year, while MoneyMutual was charging between 261 percent and 1,304 percent per year, and also sold personal information on 800,000 payday loan recipients to other payday loan companies.

"Using Mr. Williams's reputation as a trusted celebrity endorser, MoneyMutual marketed loans to struggling consumers with sky-high interest rates," Lawsky told NBC News.

Jonathan Franks, spokesman for Williams, said in a prepared statement, "Mr. Williams has FULLY (sic) cooperated with DFS’ investigation and has required all who work for him or at his behest to do the same.

"The DFS has made no finding of a violation by Mr. Williams himself and Mr. Williams has agreed to prohibit his endorsement from being used in any manner which does not comply with the agreement — any suggestion (or potential headline) to the contrary is FALSE (sic)."

"As is typical of an endorsement agreement, Mr. Williams has no role whatsoever in the business operations of Selling Source (MoneyMutual's parent firm), and his role is limited to that of a celebrity endorser."

Lawsky's office noted that MoneyMutual told prospective clients, "Montel Williams has endorsed MoneyMutual and would not do so if it were not a legitimate company," The New York Times reports, noting that the company charged up to 80 times the legal interest limit.

MoneyMutual has agreed to run a disclaimer on its site that the service is not available in New York state, NBC states.

However, ABC said Williams intends to continue as a spokesman for MoneyMutual where the service is still legal.

Williams "is not blind to the problems of the industry," Franks said, but added, "We stand by his overall endorsement of MoneyMutual," USA Today reported.

"As he has said publicly many times, Mr. Williams himself utilized short-term lending while attending the Naval Academy on more than one occasion and paid those loans back on time."

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TV talk show host and pitchman Montel Williams' reputation has taken a hit over his celebrity endorsement of a payday loan company which the New York State Department of Financial Services (DFS) says charges exorbitant rates and provides loans which are illegal.
Montel Williams, MoneyMutual, fined, loans, New York state
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2015-15-12
Thursday, 12 Mar 2015 05:15 PM
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