There is great news for service members who were swindled by dishonest loan collectors! Last week, the Consumer Financial Protection Bureau (CFPB) announced that it had obtained nearly $92 million in debt relief for approximately 17,000 consumers, most of whom are military service members owing money to Rome Finance.
According to the CFPB, Rome Finance, also known as Colfax Capital Corp., sold consumer goods with instant financing and no money down, while hiding expensive financing charges through artificially inflated prices. Rome Finance also withheld information, such as percentage rates, that should have been on billing statements. The California-based lender also illegally continued collecting on loans that were voided due to state and federal laws.
The CFPB found that Rome Finance and its affiliates provided consumers with disclosures that inaccurately conveyed low finance charges and annual percentage rates (APR). The false information prevented their customers from making informed decisions about their credit loans. For example, Rome Finance would show a service member a contract indicating an APR at 16 %, when in actuality, the APR was 100% *or* more.
The billing statements that Rome Finance sent to consumers also failed to include information 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.
The CFPB and thirteen state’s attorneys general also found that Rome Finance was not licensed in any state to provide consumer lending. The illegal lender also charged annual percentage rates that were higher than most states allow. These violations should have voided *or* limited the collectable debt in those states, according to that state’s lending law. Rome Finance again deceived their customers by failing to inform them that some *or* all of their debt was void, *or* otherwise did not have to be repaid. Many military families were misled into thinking that they had to repay the entire loan balance, and made those payments when they were not required to.
Service members who purchased goods through Rome Finance need to know that all efforts to collect on any of the outstanding Rome Finance financing agreements must cease. Rome Finance still has approximately $60 million in contracts, owed by about 12,000 consumers, that it can no longer collect on. Service members may keep the merchandise they purchased.
Rome Finance and two of their owners, Ronald Wilson and William Collins, are permanently banned from conducting any business in the field of consumer lending. The company was also ordered to reimburse affected consumers for the amount of excess finance charges they paid. But unfortunately, the company is bankrupt.
Service members are often targets for scammers and crooks. Because of this, members of the military community need to be extra vigilant, always on the lookout for deceptive loans and consumer lending. If you suspect that you were victimized by lenders acting outside the law, please submit a complaint at www.consumerfinance.gov
Military Connection proudly serves those who serve in the Army, Navy, Air Force, Marines, Coast Guard, Guard &, Reserve, Veterans and their Families. We are the go to site for Veteran Employment and information on Veteran education. Militaryconnection.com provides Veterans with and Directory of Employers, a Job Board, information on the Post-9/11 GI Bill, and a blog that offers Veterans boundless information. Be sure to visit Militaryconnection.com, the go to site.
Military Connection: $92 Million in Debt Excused: By Debbie Gregory