Timothy Coppinger, Ted Rowland charged by Federal Trade Commission in payday loans scheme; assets frozen

Between November 2012 and September 2013, online payday-loan companies controlled by Timothy Coppinger and Frampton “Ted” Rowland issued $28 million in payday loans to consumers and received $46.5 million in return.

The Kansas City businessmen did not achieve those staggering profit margins honestly, according to a Federal Trade Commission lawsuit filed September 8 (and unsealed last Friday) against Coppinger, Rowland and the constellation of shell companies they use to shield themselves from the scrutiny of consumers and law enforcement. In fact, the FTC believes that Coppinger, et al., were a sufficient threat to U.S. consumers that it filed an ex parte temporary restraining order to freeze all their assets, appoint a temporary receiver to all their business interests, and give the FTC and the receiver access to their business premises, in order to preserve the possibility of relief for consumers they’ve taken advantage of. 

The lawsuit contains sworn statements from dozens of consumers who say they were defrauded by entities controlled by Coppinger, whose “businesses” (CWB Services, Sandpoint, Namakan, and many, many others) operated for years at 2114 Central, in the Crossroads District, before recently moving across State Line Road to 6700 Squibb, in Mission. Several statements reveal that these operations would drop money into the bank accounts of individuals who had not applied for loans, and then debit out late fees and interest on that money. From the suit: 

Using consumer data purchased from third parties, Defendants have falsely represented that consumers agreed to their online payday loans, and then automatically debited finance charges from consumers’ bank accounts without their consent. Second, Defendants have misrepresented the cost of their loans — even to those consumers who actually agreed to the loans in the first place. Instead of charging consumers the amount they disclosed (the principal plus a one-time finance charge), Defendants have extracted finance charges every two weeks indefinitely, without applying any of the payments to the principal. Third, Defendants have consistently violated statutory requirements relating to the disclosure of loan terms and recurring electronic fund transfers. 

By issuing what are called “Civil Investigative Demands” to Missouri Bank (the preferred bank of several local payday operations, until the government essentially ordered it out of the business) and other institutions where Coppinger and Rowland banked — in effect, requiring those banks to open up their books — the FTC has meticulously traced the flow of money from consumers to payment processors to DBAs to the bank accounts of Coppinger and Rowland. The suit offers arguably the most comprehensive examination yet of how these online payday lending schemes work. 

The Pitch noted Coppinger’s involvement in this unsavory industry in the second part of its “Usury Suspects” series. Coppinger is the second local payday player to run afoul of the FTC. Scott Tucker got rung up back in 2012, and lost in court back in March.  

We’re hearing there may be more payday-related shoes dropping later this week. We’ll be following up on this story soon.