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The Consumer Financial Protection Bureau has filed a lawsuit against a Canadian payday lending company, alleging that its web of subsidiaries collected money that consumers did not owe and falsely threatened borrowers with imprisonment or wage garnishment.

In the lawsuit, regulators say the British Columbia-based NDG Financial Corp. and its “maze” of nine interrelated companies made and collected payday loans that were either completely or partially void in 17 states.

The companies, collectively called the NDG Enterprise, made consumers believe that federal and state laws did not apply to them, according to the lawsuit.

All of the companies except two are Canadian. Two are incorporated in Malta.

NDG Financial Corp. could not be reached for comment.

“Companies making loans within the U.S. have to comply with federal law,” bureau director Richard Cordray said in a statement. “The Consumer Bureau will work to ensure that American consumers receive the protections and fair treatment they deserve.”

The lawsuit, filed last week in U.S. District Court in New York, said that since 2011, NDG Financial has extended payday loans exclusively over the Internet through its subsidiaries to U.S. consumers.

The NDG Enterprise has made loans in all 50 states. Loans generally are 14 days, or short term, and range from $100 to $1,500. Finance charges for each $100 borrowed can be between $19.98 and $26.98.

Some loan agreements also had an illegal clause giving the NDG Enterprise the authority to collect outstanding loan amounts directly from consumers’ wages via their employers if the borrowers defaulted on the payment.

According to the lawsuit, the NDG Enterprise received payment directly from the employers’ payroll accounts “numerous” times. This type of action could result in “serious and detrimental interference with employment relationships” and hold back promotions, raises or even led to job loss, according to the lawsuit.

In “numerous instances,” the NDG Enterprise also told consumers that nonpayment of debt would result in a lawsuit, arrest, imprisonment or wage garnishment, even though it did not have the legal authority to do so.

Regulators are seeking monetary damages and to prevent the NDG Enterprise from violating federal consumer financial protection laws.

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