CFPB Settles with Financial Services Company Following Unfair and Deceptive Practices

On April 1, 2020, the CFPB settled a case against a short-term lender after finding that the financial services company engaged in unfair and deceptive acts and practices.

The CFPB found that the company violated the Consumer Financial Protection Act, Fair Credit Reporting Act, and Truth in Lending Act.  The company’s actions included calling delinquent consumers, as well as their employers and references, up to twenty times per day.  During the calls, the company divulged information about the consumer and their debts and repeatedly called even after being told to stop by consumers, their employers, and their references.  Additionally, the company used telemarketing and television advertisements claiming that customers could save 50% on loan repayments, when, in fact, the offer was for a 50% rebate for the consumer’s initial loan payment.    The company did not disclose the annual percentage rate for its loans when consumers asked during telemarketing calls.  Lastly, the company also failed to create effective policies and procedures for mandatory consumer agency reports. 

The terms of the settlement includes over $1.3 million in payment by the company; $1.1 million in civil monetary payments and about $300,000 for redress to consumers.   The company also has three months to create a compliance and oversight plan.