Consumer Finance Insights
June 29, 2017

Home Financing Company Settles with State of New Jersey

On June 22, 2017, the New Jersey Office of the Attorney General (“New Jersey AG”) ​​and the New Jersey Division of Consumer Affairs (“New Jersey DCA”) announced a settlement with a Georgia financing company that facilitates on-the-spot financing for home improvements through participating home improvement contractors.  The New Jersey DCA opened an investigation to determine whether the company violated the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 et seq., based on various consumer complaints.  According to the New Jersey AG, consumers alleged that in some instances they were not aware the loan was taken out in their name, were not given an opportunity to read or sign loan documents, and/or were not provided a copy of loan documents.

Under the agreed Assurance of Voluntary Compliance, the company agreed to several changes in its business practices, including verifying contractor information, terminating contractors with prior consumer protection violations, providing customers with clear loan information, blocking contractor charges for unperformed work, requiring written consumer consent to authorize transactions, suspending collections on disputed charges, facilitating refunds where appropriate, and employing a compliance officer.  The company will also make a $100,000 payment to the State for various enforcement costs and consumer outreach services, pay an additional $60,000 to settle six consumer complaints, and work with four consumers to correct their credit reports.

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