On November 20, the CFPB announced a settlement with a Florida-based non-bank and the founder of the non-bank (collectively, the “defendants”), resolving allegations that the defendants violated the Consumer Financial Protection Act by making misleading statements in disclosures and advertisements for their car loan. payment acceleration program. According to the Bureau, the defendants ‘program automatically deducts partial payments every two weeks from consumers’ bank accounts and then transfers those payments each month to lenders or consumer service providers. As a result, registered consumers end up making the equivalent of 13 monthly payments each year instead of 12. Although the program is touted as an opportunity for consumers to save money, the Bureau claimed that the defendants misrepresented the amount consumers would save by not disclosing a $ 399 registration fee in the savings calculations presented to consumers. Due to registration fees, program costs “generally exceed[ed] savings, ”the Bureau alleged, noting that the defendants had no basis to claim that thousands of consumers saved money by enrolling in the program.
The consent order requires the defendants to pay a civil fine of $ 1 and compensation of $ 9.3 million, which is suspended from payment of $ 900,000 due to the defendants’ demonstrated inability to pay the full judgment . The Bureau noted in its press release that aggrieved consumers may be eligible for additional relief from the Bureau’s Civil Sanctions Fund. Defendants are also prohibited from making misleading representations regarding the payment program or any other payment acceleration program.