Some 17,000 service members nationwide and other consumers who were targeted by Rome Finance through unfair lending practices will not have to payoff their outstanding finance agreements according to the Consumer Financial Protection Bureau (CFPB) and several state attorney generals.
Florida Attorney General Pam Bondi said in a media release that more than 800 Florida service members were targeted by the predatory lending schemes and will receive more than $4 million in debt relief.
The bureau announced action July 29, 2014 against Colfax Capital Corporation and its subsidiary (formerly known as Rome Finance Co. Inc.) for engaging in unlawful lending that financially hurt servicemembers.
The company provided financing at places such as SmartBuy to sell products to military members. But the merchandise cost was inflated to “hide the true finance charges that servicemembers would have to pay, typically by military allotment,” Holly Petraeus wrote on the CFPB blog.
“This trapped servicemembers in contracts that generated millions of dollars for the company and substantial debt for its customers,” Petraeus wrote.
She called the enforcement action “the last gasp of a chameleon-like company with a long and deplorable record of preying on servicemembers.”
Whether they borrowed to buy computers or gaming systems military members and other consumers who used Rome Finance to make their purchases were victims of “predatory lending schemes.” While the servicemembers will no longer have to pay off their unfair loans, Colfax is in bankruptcy and does not have assets to repay consumers.
Florida consumers who suspect scams or fraud can file a complaint by calling 1(866)-9-NO-SCAM or by visit MyFloridaLegal.com.
Complaints about financial services or products also can be filed with the Consumer Finance Protection Bureau.