A payday lender that charged 860% interest on loans and tried to get borrowers to accept wage garnishment if they couldn't pay them back has settled a Federal Trade Commision lawsuit.

The FTC sued Ecash and GeteCash in March, accusing the Utah-based company of requiring online loan applicants to check a box agreeing to loan terms that included an inconspicuous statement saying wages will be garnished -- removed involuntarily from paychecks. Only federal agencies have the right to garnish employee wages without a court order if the government is owed money.

Aware of the law, GeteCash, calling itself LoanPointe LLC, tried to assert the same collection rights as the government in letters to employers, the complaint says. The loans were for less than $1,000.

The company also falsely claimed consumers knew their pay would be garnished and had an opportunity to dispute it. Further, the company broke the law by alerting employers and co-workers of a consumer's debt without consent.

The FTC alleges Eastbrook LLC, also doing business as Ecash and GeteCash, LoanPointe LLC, Mark S. Lofgren, and three other individuals violated the FTC Act, the Fair Debt Collection Practices Act, and the Credit Practices Rule.

The settlement prohibits Lofgren from collecting debts through wage assignment, misrepresenting facts in order to collect a debt, contacting employers in trying to collect consumers' debts, and disclosing a debt to any third party. In addition, Lofgren is barred from selling or otherwise benefiting from borrowers' personal or financial information.

The state of Idaho's Consumer Finance Bureau sent a cease-and-desist notice to the company in May, which it ignored, accusing it of making loans in that state without a license, and attempting to garnish wages. GeteCash earned an F-rating, the lowest, from the Better Business Bureau.

GeteCash did not immediately return a call seeking comment.

The FTC describes payday loans as an extremely expensive way to secure credit and in recent months has sued several unscrupulous lenders nationwide for setting financial traps for cash-strapped consumers.