The sites were removed after OFI served subpoenas on the two Internet service providers hosting the sites. The providers then removed the sites for Kentucky Title Loans Inc. and World Financial Solutions.
The two companies apparently are not legitimate Kentucky lenders and appear to be using names of former Kentucky businesses that are now defunct. The Web sites purported to offer loans at reasonable rates. However, the companies required an up-front payment, and consumers reported that after sending the money to addresses in Canada, they never received a response or a loan.
Officials at OFI said the practice appeared to be a variation of a common loan scam called an advance fee scheme. According to KRS 367.381, it is a violation of the Consumer Protection Act for a loan broker to assess or collect an advance fee from a borrower.
"Consumers should be aware that requiring an advance fee to obtain a loan is illegal, whether it's through Internet, direct mail or in person," said David Coyle, director of OFI's Division of Financial Institutions.
OFI received the first consumer complaint regarding Kentucky Title Loans on June 25. The OFI Legal Division issued a subpoena on July 2 to the Internet service hosting Kentucky Title Loans, asking for subscriber contact information. OFI issued a cease-and-desist order on July 11 that can be read on OFI's Web site.
A second subpoena was issued on July 11 to the Internet service hosting a Web site that was similar in design and promised the same type of service. Shortly after receiving the subpoenas, each Web server removed the pages in question. OFI plans to issue a cease-and-desist order against World Financial Solutions.
