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More than 110,000 consumers who applied for online payday loans but were tricked into paying for prepaid cards instead will be getting a check in the mail, thanks to a settlement reached by the Federal Trade Commission (FTC) announced by the agency on August 31. While the total amount being refunded is large—$1.9 million—the checks themselves will be between $10 and $15 each.

Victims were looking for loans when they applied online, says the FTC. But a cleverly designed application form fooled them into signing up for the Ever Private Card or the Secret Cash Card Debit Card, prepaid cards with a zero balance. Applicants paid up to $54.95 for the cards.

With a prepaid card, a consumer loads his or her own money onto the card and then uses it to spend that money. While a prepaid card can be convenient, it is not a loan.

According to the FTC, URLs that facilitated these transactions include:

ChristianFaithFinancial.com, MagnoliaFinancial.org, ThatcherPrescott.com, PaydayUSA.org, SouthernFinancialFunding.com, MtWhitneyFinancial.com, PaydayMatchup.com, AdditionalEarning.com, PrescottFinancial.com, MaximumWagesNow.com, OnlinePayday.org, OrchidFinancial.org, MalibuFinancial.com, SilentCashLending.com, InstantPaydayMatchup.com, MyFamilyLoans.org, WomensPaychecks.com, CompareAdvances.com, AtlasPeakFinancial.com, ShortTermLoanExpert.com, CheckCashCentrale.com, MtVernonFinancial.com, PaydayLoanQuotes.com, RockOfMaine.com, UpTo500.com, and HarborCreditCashAdvance.com.

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The question remains whether recipients—who have already been scammed—will think the refund checks, being sent by the FTC’s redress administrator Epiq Systems, are also fraudulent and throw them away. The FTC is warning that it “never requires consumers to pay money or provide information before redress checks can be cashed” which raises the question: could another scammer imitate these checks and use them to perpetuate still another scam?

It’s a legitimate question, as online payday loan applications have been identified as the source of information used in a payday loan collection scam that’s generated numerous complaints to regulators and law enforcement agencies across the country. The scammers, who are based overseas, call American consumers who applied for online payday loans and threaten them with serious consequences if they don’t pay bogus debts immediately.

[Related Article: Online Payday Loan Scammers Just Won’t Quit]

Consumers who get a check from Epiq systems can visit the FTC’s refund website to confirm it is part of a legitimate refund campaign. Or they can call Epiq Systems at 1-877-853-3394.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad.

[Free Tool: Obtain your Identity Risk Score from Credit.com]

Image: Lainey Powell, via Flickr.com

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