Servicemembers get debt relief after consumer bureau cites predatory lender
WASHINGTON — The Consumer Financial Protection Bureau announced Tuesday it had obtained nearly $100 million in debt relief for 17,000 consumers — primarily military servicemembers — who owned money to Colfax Capital Corp. and Culver Capital, LLC, known collectively as Rome Finance.
The bureau said the company promised troops and others that they could buy consumer goods with instant financing and no money down, masking expensive financing charges by artificially inflating the prices of goods. Rome finance also withheld information that should have been on billing statements, such as percentage rates, the bureau said, and illegally continued collection on loans that were void.
“Rome Finance’s business model was built on fleecing servicemembers,” said CFPB Director Richard Cordray. “Rome Finance lured servicemembers 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.”
Under the CFPB’s consent order to Rome Finance, the company agreed to stop collections on $92 mil-lion owed by 17,000 consumers, notify credit reporting bureaus the debts were paid and pay a $1 mil-lion penalty, among other actions. In addition, the owners are permanently banned from consumer lending, CFPB said.
Secretary of Defense Chuck Hagel lauded the order, saying in a written statement, “No one who serves our country in uniform — especially during a time of war — should ever fall victim to predatory financial practices, and today’s announcement is an important step in righting this wrong.”