Cash America to Refund Up to $14M for Robo-Signing, Overcharging Servicemembers

Cash America to Refund Up to $14M for Overcharging ServicemembersThe two-year-old U.S. Consumer Financial Protection Bureau has taken its first enforcement action against a payday lender by forcing Cash America International to refund consumers for robo-signing court documents in debt collection lawsuits.
The CFPB said Wednesday it also found that Cash America – one of the largest short-term, small-dollar lenders in the country – violated the Military Lending Act by illegally overcharging servicemembers and their families.
Cash America will pay up to $14 million in refunds to consumers and it will pay a $5 million fine for these violations and for destroying records in advance of the Bureau’s examination.
“This action brings justice to the Cash America customers who were affected by illegal robo-signing, and shows that we will vigilantly protect the consumer rights that servicemembers have earned,” said CFPB Director Richard Cordray. “We are also sending a clear message today to all companies under our watch that impeding a CFPB exam by destroying documents, withholding records, and instructing employees to mislead examiners is unacceptable.”
Payday loans provide quick cash between paychecks or other income. They can offer quick access to credit, especially for consumers who may not qualify for other credit. Many payday loans are for small-dollar amounts that must be repaid in full in a short period of time. However, fees can be extremely high, adding up to the equivalent of triple-digit interest rates.
Cash America is a publicly traded financial services company based in Fort Worth, Texas that provides consumer financial products and services, including payday loans, lines of credit, installment loans, and pawn loans.
With hundreds of retail locations across more than 20 states, it is one of the largest payday lending companies in the United States. Cash America’s Chicago-based subsidiary, Enova, offers online loans in 32 states under the brand name CashNetUSA.
Today’s action is the Bureau’s first public enforcement action against a payday lender; its first public action under the Military Lending Act; and the first public action for a company’s failure to comply fully with the CFPB’s supervisory examination authority.
Cash America has already voluntarily paid back about $6 million to military borrowers and victims of the robo-signing practices.
Through the CFPB order, the company have committed to offer an additional $8 million to consumers, for a total refund of up to $14 million. Consumers who were subject to debt collection lawsuits in the state of Ohio from 2008 through January 2013 are eligible.
More information from the CFPB is available here.

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