A company that provides management services to more than 300 payday loan and check cashing stores, and an affiliated company that owns and operates several stores, will pay $101,500 to settle Federal Trade Commission charges that they violated federal law by allowing sensitive consumer information to be tossed into trash dumpsters.

The FTC charged that PLS Financial Services Inc. and The Payday Loan Store of Illinois Inc. failed to take reasonable measures to protect consumer information, resulting in the disposal of documents containing sensitive personal identifying information – including Social Security numbers, employment information, loan applications, bank account information and credit reports – in unsecured dumpsters near several PLS Loan Stores or PLS Check Cashers locations.  PLS Group, Inc., which owns PLS Financial Services and The Payday Loan Store of Illinois, was also named in the complaint.

PLS Financial and The Payday Loan Store, according to the complaint, violated the FTC's Disposal Rule by not protecting against unauthorized access to consumer information in the disposal of credit reports. They also allegedly violated the Gramm-Leach-Bliley Safeguards Rule and Privacy Rule, which require financial institutions to develop and use safeguards to protect consumer information, and deliver privacy notices to consumers. Further, the FTC charged that all three defendants violated the FTC Act by misrepresenting that they had implemented reasonable measures to protect sensitive consumer information.

This is the third time the FTC has charged a violation of the Disposal Rule, which requires that companies dispose of credit reports and information derived from them in a safe and secure manner.  

According to the FTC complaint, PLS Group owns approximately two dozen operating companies, such as The Payday Loan Store of Illinois, that in turn own and operate more than 300 retail stores in nine states under the names PLS Loan Stores and PLS Check Cashers.  These stores offer a variety of products and services, including payday loans, check cashing, automobile title loans, debit cards, phone cards and notary services. 

PLS Financial Services provides management services to the PLS Loan Stores and PLS Check Cashers locations, including establishing their policies and procedures for the handling and disposal of consumer financial information.

In addition to the $101,500 civil penalty, the settlement bars all of the companies from violating the Disposal, Safeguards and Privacy Rules and from misrepresenting the extent to which they maintain and protect the privacy and integrity of personal information.

The order also requires that the companies implement and maintain a data security program with independent third-party audits every other year for the next 20 years. It further contains certain bookkeeping and record keeping provisions to allow the FTC to monitor compliance.

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