CFPB: $92M in debt relief for servicemembers
July 30, 2014 – CFPB, with 13 state attorneys general, won about $92 million in debt relief for servicemembers and other consumers harmed by the predatory lending scheme of Colfax Capital Corporation and Culver Capital, LLC, also collectively known as Rome Finance.
CFPB announced Tuesday that about 17,000 U.S. servicemembers and consumers will receive the debt relief from a scheme that promised them no money down and instant financing on electronics such as computers, videogame consoles and televisions typically sold at mall kiosks near military bases.
"Rome Finance's business model was built on fleecing servicemembers," said CFPB Director Richard Cordray in a statement. "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."
Along with hiding finance charges by inflating the announced price of the goods being sold to the servicemembers and consumers, the group also withheld information on billing statements and illegally collected on loans that were void, CFPB reported.
Under the CFPB enforcement action, Rome Finance must, among other things:
- provide approximately $92 million in debt relief;
- update credit reporting agencies and notify servicemembers and other consumers affected of their debt status;
- cease consumer lending; and
- pay redress for hidden finance charges and civil money penalties.
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