Smart SpendingSmart Spending

Cheated soldiers to get $92M in debt relief

Rome Finance's predatory lending scheme affected 17,800 service members, the Consumer Financial Protection Bureau says.

By MSN Money Partner Aug 4, 2014 1:21PM

This post comes from Krystal Steinmetz at partner site Money Talks News.


Money Talks News on MSN MoneyA total of $92 million in debt relief is on the way for nearly 17,800 service members who authorities said fell victim to a predatory lending scheme.


The debt relief is part of a settlement with the Consumer Financial Protection Bureau and 13 state attorneys general. The CFPB said the company, Rome Finance, failed to truthfully disclose charges and interest rates, and assisted retailers in inflating prices for items paid for out of service members' paychecks, The Associated Press reported.


Military Man © Stockbyte/SuperStockAccording to a news release from the CFPB:

"Rome Finance's business model was built on fleecing service members," said CFPB director Richard Cordray. "Rome Finance lured service members 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."

According to the Merced Sun-Star, legal documents filed against Rome Finance said soldiers ended up paying the company "many times more than the retail prices of the products they’d bought." The Sun-Star said:

The company also sent billing statements that didn’t include information required by law, such as the loan's high annual percentage rate and the closing date of the billing cycle.
Rome Finance wasn't licensed to provide consumer loans, according to the documents, and the APRs it charged were higher than allowed in some states, such as New York and North Carolina. These violations should have voided the debt.

The CFPB news release said that under the settlement, Rome Finance principals William Collins and Ronald Wilson also agreed to:

  • Help repair the credit of anyone damaged by their scheme.
  • Repay soldiers who paid excess finance fees.
  • Cooperate with service members who seek to vacate court judgments against them.
  • Cease consumer lending.

More from Money Talks News

4Comments
Aug 4, 2014 4:27PM
avatar
what a garbage company! My son was in the Navy and these kids seem to be a target for scum like this.
Aug 5, 2014 12:43PM
avatar
Taking advantage of someone who is serving their country could be a new all time low.
Aug 5, 2014 11:02AM
avatar
Hey Bobo 563
These stupid idiots served and risked their lives so idiots like you can post stupid comments.  where did you serve?

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More