Auto Lender to Pay $2.28 Million in Refunds to Harmed Service Members
A federal regulator has filed an administrative order against an auto lender that specializes in loans to service members.
According to the Consumer Financial Protection Bureau (CFPB), the Security National Automotive Acceptance Company (SNAAC) engaged in illegal debt collection practices. The order requires the company to refund or credit about $2.28 million to service members and other consumers who were allegedly harmed, and pay a penalty of $1 million.
A separate court order bans SNAAC from using aggressive tactics, such as exaggeration, deception, and threats to contact commanding officers, to coerce service members into making payments.
SNAAC has neither admitted nor denied the allegations of the complaint.
When consumers defaulted on their loans, the CFPB alleged in its 2015 lawsuit, SNAAC used aggressive collection tactics that took advantage of service members' special obligations to remain current on debts. Both active duty and former service members could encounter trouble with the company if they missed or were late on payments. Once service members defaulted, they became subject to repeated threats to contact their chain of command. In many other instances, the company exaggerated the consequences of not paying. Thousands of people were victims of the company's aggressive tactics.
Along with the monetary penalties, SNAAC must also end all of their illegal debt collection practices, including threatening to contact commanding officers, making misstatements about potential disciplinary action and making threats of legal action.
More information about the administrative order can be found on the CFPB website.