Unfair Debt Collection Practices Against Military Personnel

Sadly young servicemen may be deceived and face unlawful collection tactics.  A federal agency punished an agency for such tactics.

Bureau Sued Auto Lender Earlier This Year for Deception and Threats to Contact Commanding Officers

The Consumer Financial Protection Bureau (CFPB) filed an administrative order against an auto lender  for engaging in illegal debt collection practices. The order requires the company to refund or credit about $2.28 million to servicemembers 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 servicemembers into making payments.

According to the agency, when consumers defaulted on their loans, the CFPB alleged, the company  used aggressive collection tactics that took advantage of servicemembers’ special obligations to remain current on debts. Both active duty and former servicemembers could encounter trouble with the company if they missed or were late on payments. Once servicemembers defaulted, they became subject to repeated threats to contact their chain of command.

The CFPB alleged that the company routinely exaggerated the potential impacts of a delinquency on service members’ careers. The company told customers that their failure to pay could result in action under the Uniform Code of Military Justice, as well as a number of other adverse career consequences, including demotion, loss of promotion, discharge, denial of re-enlistment, loss of security clearance, or reassignment. In fact, these consequences were extremely unlikely.
Contacted and threatened to contact commanding officers to pressure servicemembers into repayment: The company buried a provision within the fine print of contracts saying that it could contact commanding officers about service members’ debts.

The company was alleged to have falsely threatened to garnish service members’ wages:
Call (973) 598-1980 for a Free Consultation on Unfair Military Debt Collection

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