Fleeced Military Members Get Debts Forgiven

You’d think military members might automatically get a fair shake when they go to buy something or try to finance it. That, apparently, is the naive view.  

And New York Attorney General Eric Schneiderman, 12 other state attorneys general and the Consumer Financial Protection Bureau (CFPB) remind us, once again, that some make millions preying on men and women in the military.

The latest outrage involves Colfax Capital Corporation and Culver Capital, LLC, known as Rome Finance.

An investigation found that more than 17,000 service members and other consumers came up on the short end of the stick with Rome Finance. Now the fleeced military members will get debts forgiven to the tune of $92 million.

Rome Finance set up kiosks near military bases and offered  computers, TVs, games and other electronic devices and equipment with an irresistible lure of no money down and instant financing.  They used typical predatory lending tactics.

The devil was in the small print of the contracts consumers signed. The CFPB says, “Rome Finance . . . masked expensive finance charges by artificially inflating the disclosed price of the consumer goods being sold. Rome Finance also withheld information on billing statements and illegally collected on loans that were void.”

It started innocently enough when a buyer filled out a credit application at the kiosk and signed financing agreements that did not accurately disclose the amounts they would have to pay for that financing.

CFPB Director Richard Cordray said the company’s, “. . . long run of picking the pockets of our military has come to an ignominious end.”

 It turns out the California based company was not licensed to lend money in any state and charged higher annual percentage rates than some states allowed.

 As a result of the Rome Finance settlement with the CFPB and 13 state attorneys general, service members can keep what they bought, but they won’t have to pay the debts.  All collections will be stopped on the $60 million contracts owed by 12,000 consumers and $32 million more owed by more than 5,000 consumers who had financing agreements.

Rome will also have to notify credit reporting agencies and service members that the debt is no longer owed.

The company filed for bankruptcy, is out of business, and its owners Ronald Wilson and William Collins are permanently banned from conducting any business in the field of consumer lending.

Tell us if a company picked your pocket.

 

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Barbara Nevins Taylor

As the winner of 22 Emmy Awards and a slew of journalism honors and awards, I created ConsumerMojo.com to give you the straight story about complicated stuff. Tell us what you want to know and we'll get you the answers.