A total of $92 million in debt relief is on the way for nearly 17,800 service members who authorities said fell victim to a predatory lending scheme.
The debt relief is part of a settlement with the Consumer Financial Protection Bureau and 13 state attorneys general. The CFPB said the company, Rome Finance, failed to truthfully disclose charges and interest rates, and assisted retailers in inflating prices for items paid for out of service members’ paychecks, The Associated Press reported.
According to a news release from the CFPB:
“Rome Finance’s business model was built on fleecing service members,” said CFPB director Richard Cordray. “Rome Finance lured service members in with the promise of instant financing on expensive electronics, then masked the finance charges with inflated prices in marketing materials and later withheld key information on monthly bills. Today, their long run of picking the pockets of our military has come to an ignominious end.”
According to the Merced Sun-Star, legal documents filed against Rome Finance said soldiers ended up paying the company “many times more than the retail prices of the products they’d bought.” The Sun-Star said:
The company also sent billing statements that didn’t include information required by law, such as the loan’s high annual percentage rate and the closing date of the billing cycle.
Rome Finance wasn’t licensed to provide consumer loans, according to the documents, and the APRs it charged were higher than allowed in some states, such as New York and North Carolina. These violations should have voided the debt.
The CFPB news release said that under the settlement, Rome Finance principals William Collins and Ronald Wilson also agreed to:
- Help repair the credit of anyone damaged by their scheme.
- Repay soldiers who paid excess finance fees.
- Cooperate with service members who seek to vacate court judgments against them.
- Cease consumer lending.