Federal agency charges area businessman and online lender Integrity Advance

A federal agency has claimed that Integrity Advance LLC, an online lender and its chief executive officer James R. Carnes had deceived consumers.

Carnes, a Johnson County businessman, has previously owned Go Cash, which he sold in 2012. Integrity Advance made loans between May 2008 and December 2012, according to the Consumer Financial Protection Bureau.

The bureau said it issued a notice of charges against the company and Carnes but will not make the notice available publicly until 10 days after the company has been served.

Integrity Advance, which the bureau said is based in Delaware, and Carnes could not be reached. The loans were for $100 to $1,000 borrowers applied by entering personal information online.

In an announcement, the bureau said Integrity Advance violated the Truth in Lending Act and Electronic Fund Transfer Act. It said the company and Carnes violated provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Dodd-Frank, passed in the wake of the U.S. financial crisis, prohibits hiding the total cost of loans, requiring repayment by pre-authorized electronic funds transfers and continuing to debit borrowers’ accounts after the consumers canceled the authorization, the announcement said.

At Integrity Advance, violations of those provisions meant some customers would pay finance charges that were twice as much as the amount they borrowed.

The agency said its action seeks redress for the consumers, civil money penalties and an injunction. An administrative law judge will try the case.

This story was originally published November 19, 2015 at 3:33 PM with the headline "Federal agency charges area businessman and online lender Integrity Advance."