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Equipment Finance News Legal action over deceptive lending to service members Published: 22nd June 2015 Share This week saw the CFPB announce it is to sue an auto loan company, Security National Automotive Acceptance Company, for aggressive debt collection tactics against military personnel. In a complaint filed in federal court, the CFPB alleges that the company used a combination of illegal threats and deceptive claims in order to collect debts. The CFPB is seeking compensation for harmed consumers, a civil penalty, and an order prohibiting the company from committing future violations. “Security National Automotive Acceptance Company took advantage of military rules to put enormous pressures on service members to pay their debts,” said CFPB director Richard Cordray. “For all the security they provide us, service members should not have their financial and career security threatened by false information from an auto loan company.” Security National Automotive Acceptance Company (SNAAC) is an Ohio-based auto finance company that operates in more than two dozen states and lends money primarily to active-duty and former military to buy used motor vehicles. The CFPB alleges that the company took advantage of service members’ special obligations to remain current on debts. Once consumers defaulted, they became subject to repeated threats to contact their chain of command. In other instances, the company exaggerated the consequences of not paying, suggesting personnel could face demotion, loss of promotion, discharge, denial of re-enlistment, loss of security clearance, or reassignment, all of which were extremely unlikely. The lender also claimed to be starting legal actions or seeking to dock pay when neither option was open to them. The numbers affected are believed to run into the thousands. The CFPB complaint is not a finding or ruling that the company has actually violated the law. Pat Sweet Correspondent - Asset Finance Connect Sign up to our newsletter Featured Stories NewsEvolving roles of banks and independents in US Corporate Member NewsAssociated Asphalt secures funding from Paragon Bank NewsDutch leasing market sees robust growth in H1 2024 Equipment Finance