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Consumer Finance Insights
June 3, 2020

CFPB Announces Settlement with Short-term Lenders, Resolving Allegations of Unfair and Deceptive Acts and Practices

​On June 2, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it had reached a settlement with multiple related companies based in Tennessee that offer payday and auto-title loans. The CFPB alleged that the companies made deceptive disclosures, failed to refund overpayments on its loans, and engaged in unfair debt collection practices, in violation of the Consumer Financial Protection Act (CFPA) and the Truth in Lending Act (TILA).

For example, the CFPB alleged the defendants concealed or understated the finance charges on its auto-title loans for over 4,000 customers, and that customers paid $3.5 million more in finance charges than were actually disclosed. The companies also allegedly made illegal calls to customers’ places of work and other third parties and disclosed customers’ debts, in violation of the CFPA.

The consent order prohibits the companies from misrepresenting its finance charges on auto-title loans, requires them to make timely refunds, prohibits unlawful debt collection practices, and imposes a $3.5 million judgment in consumer redress, which is suspended upon payment of $2 million and a $1 civil money penalty.

The post CFPB Announces Settlement with Short-term Lenders, Resolving Allegations of Unfair and Deceptive Acts and Practices appeared first on Consumer Finance Insights (CFI).