Settlement Targets Crooked Military LendersPosted: Updated:
Indiana is part of a national settlement targeting predatory lending practices of a military consumer lender. The Office of Attorney General Greg Zoeller says close to $1.5 million in debt will be canceled for 261 service members in the state. July 29, 2014
INDIANAPOLIS, Ind. - Attorney General Greg Zoeller along with 12 other attorneys general and the federal Consumer Financial Protection Bureau announced a settlement with a military consumer lender based in California and Georgia.
Colfax Capital Corporation and Culver Capital, LLC, also known collectively as Rome Finance, offered credit to consumers purchasing products typically sold at mall kiosks near military bases with the promise of instant financing with no money down. Servicemembers and other consumers would fill out a credit application at the kiosk and, if approved, sign a financing agreement. The agreement failed to accurately disclose the amounts that they would have to pay for the financing, weighing down consumers with expensive debt. Their lending scheme also included withholding required financial information from billing statements and unfairly collecting debt that was not owed.
"Those who protect our country should not have to worry about being preyed upon and scammed out of their earnings," Zoeller said. "The collective federal and state effort is a step in the right direction to provide some relief to these servicemembers and other vulnerable consumers who were unfairly targeted and harmed."
As part of the settlement, Rome Finance is required to provide nearly $92 million in debt relief for more than 17,000 U.S. servicemembers and other consumers harmed by the company's lending schemes. The company is also forbidden to conduct any business in the field of consumer lending as well as alleviate all affected consumers of their debt and mark it as "paid in full" with consumer finance reporting agencies.
Of that $92 million, nearly $1.5 million of debt owed to 261 servicemembers from Indiana will be cancelled and their credit reports will be updated to show payment in full.
Along with Indiana and the CFPB, attorneys general from the following states participated in this national effort: Colorado, Delaware, Florida, Georgia (participating through the Georgia Governor’s Office), Kentucky, Iowa, Massachusetts, Michigan, New York, North Carolina, Tennessee and Vermont.
Attorney General Greg Zoeller thanks Deputy Attorney General Tom Irons for his work on this case.
Source: The Office of Indiana Attorney General Greg Zoeller