Aug 8 (Reuters) – The U.S. government has issued subpoenas
to banks and other companies that handle payments for an array
of questionable financial ventures, including online payday
lenders, the Wall Street Journal reported, citing Justice
Department officials.
The journal did not identify the banks and other companies
to whom subpoenas had been issued.
A shift in strategy appears to be in place, with the
government going after the infrastructure that enables companies
to withdraw money from people’s bank accounts rather than just
targeting individual firms.
Payday lending volumes increased by 10 percent to $18.6
billion in 2012 from the previous year, accounting for nearly 40
percent of industry-wide payday loan volume, according to
investment bank Stephens Inc, said the newspaper.
Regulators are also bearing down on telephone and online
offers in which marketers try to get people to pay for
non-existing services or phony offerings of work-from-home
programs, the paper quoted officials as saying.
“We are changing the structures within the financial system
that allow all kinds of fraudulent merchants to operate,” a
Justice Department official said, with the intent of “choking
them off from the very air they need to survive”. ()
Justice Department could not be reached immediately for
comment outside of regular U.S. business hours.
