CFPB Announces $1.3 Million Settlement With Short-Term Lender Resolving Allegations of Unfair and Deceptive Practices

On April 1, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with an installment-loan lender, resolving allegations that the lender violated the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531(a), 5536(a)(1)(B), Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681 et seq. and its implementing regulation, Regulation V, 12 C.F.R. pt. 1022, and the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601-1666j and its implementing regulation, Regulation Z, 12 C.F.R. pt. 1026.

The lender allegedly made deceptive representations to consumers in television ads and through direct telemarketing.  The lender told consumers that it was offering 50% off loan fees, when in fact that was not the case.  The CFPB also alleged that the lender engaged in unfair debt collection practices by phoning consumers’ places of work even after being asked to stop, and by disclosing the existence of consumers’ debts to third parties.  The lender also allegedly failed to maintain adequate policies and procedures for furnishing information to credit reporting agencies, which potentially affected the accuracy of information furnished concerning up to 20,000 consumers.

Under the terms of the consent order, the lender will pay $286,675 in consumer redress and $1.1 million in civil penalties to the CFPB.  The order also prohibits the lender from placing calls to a consumer’s workplace if the consumer has asked it not to.