"Rome Finance's business model was built on fleecing servicemembers," said CFPB Director
Colfax, formerly known as
Servicemembers and other consumers would fill out a credit application at the kiosk and, if approved, sign financing agreements that did not accurately disclose the amounts they would have to pay for that financing. These contracts generated millions for Rome Finance while weighing down consumers with expensive debt. Rome Finance has been the subject of previous state and federal enforcement actions and Colfax is currently in Chapter 7 bankruptcy. The
* Hid finance charges when marketing products: Rome Finance and merchants it worked with masked expensive finance charges by artificially inflating the disclosed price of the consumer goods being sold. As a result, they provided consumers with disclosures that had inaccurately low finance charges and annual percentage rates (APR). Consumers received disclosures, for example, indicating the APR was 16 percent when in fact the APR was 100 percent or more. That inaccurate information prevented consumers from making an informed decision about whether to take out credit.
* Withheld required financial information from billing statements: Billing statements that Rome Finance sent to consumers failed to include certain disclosures required by law such as: the annual percentage rate, the balance that was subject to that interest rate, how that balance was determined, the closing date of the billing cycle, and the account balance on the closing date.
* Deceptively, unfairly, and abusively collected debt that was not owed: Rome Finance was not licensed to provide consumer lending in any state and charged annual percentage rates higher than some states allowed, which voided or limited the collectable debt in some states under state lending law. Rome Finance deceived consumers in these states by failing to inform them that some or all of their debt was void or otherwise did not have to be repaid. As a result, many consumers were misled into thinking that they had to repay the entire loan balance and making those payments, when they did not have to.
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the
* Provide approximately
* Update credit reporting agencies and notify servicemembers and other consumers of debt status: The Colfax Trustee must update the credit reporting agencies so that affected consumers are listed as having paid their debt. The Colfax Trustee must also notify all affected consumers that their debt will no longer be collected.
* Rome Finance and their owners must cease consumer lending: Rome Finance and two of their owners,
* Pay redress for hidden finance charges: Rome Finance was ordered to pay redress to compensate affected consumers for the amount of excess finance charges they paid. When Colfax's Trustee has complied with certain provisions of the Consent Order, the requirement to pay redress will be suspended because Rome Finance has no ability to pay such redress.
* Pay civil money penalty: For its inaccurate disclosures, and unfair, deceptive, and abusive practices, Colfax, through its bankruptcy trustee, will make a
* Cooperate with servicemembers and other consumers who seek to vacate judgments: The Colfax Trustee is required until the Colfax bankruptcy case is closed to cooperate in executing any documents presented to him to vacate or satisfy any judgments against consumers relating to the financing agreements.
The full text of the
TNS 30BautistaJude 140730-4813580 30BautistaJude
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