CFPB Sues Auto Lender For Aggressive Debt Collection Tactics Against Servicemembers
By now it should come as no surprise that lenders shelling out thousands of dollars to help consumers make purchases for things like houses and cars often use lies and threats in attempts to recoup those funds. And while those tactics might result in some payments, they will also likely draw the ire of federal regulators.
Just ask Ohio-based Security National Automotive Acceptance Company: the latest shady lender facing a lawsuit from the Consumer Financial Protection Bureau over allegations it violated consumer protection laws in order to collect debts.
According to the CFPB complaint [PDF], since July 2011 SNAAC – which specializes in lending money to active-duty and former military to buy used motor vehicles in more than two dozen states – collected millions of dollars from thousands of servicemembers using unfair, deceptive, and abusive practices.
Both active-duty and former servicemembers tell the CFPB that they encountered trouble with the company if they missed or were late on payments.
The CFPB claims that in order to collect on debts, SNAAC routinely exaggerated the potential impacts on servicemembers’ careers if they remained delinquent on their loan obligations, often telling borrowers they could face demotion, loss of promotion, discharge, denial of re-enlistment, loss of security clearance, or reassignment. The suit claims that these repercussions were almost certainly unlikely.
http://consumerist.com/2015/06/17/cfpb-sues-auto-lender-for-aggressive-debt-collection-tactics-against-servicemembers/
