The Consumer Financial Protection Bureau (CFPB) announced yesterday that it has filed an administrative order against Security National Automotive Acceptance Company (SNAAC), an auto lender specializing in loans to servicemembers, for engaging in illegal debt collection practices. The order requires the company to refund or credit about $2.28 million to servicemembers and other consumers who were allegedly harmed, and pay a penalty of $1 million. A separate court order bans SNAAC from using aggressive tactics, such as exaggeration, deception, and threats to contact commanding officers, to coerce servicemembers into making payments.
SNAAC, LLC is an Ohio-based auto finance company that operates in more than two dozen states and specializes in lending to servicemembers. It lends money primarily to active duty and former military to buy used motor vehicles. The CFPB sued SNAAC in June 2015. When consumers defaulted on their loans, the CFPB alleged, SNAAC used aggressive collection tactics that took advantage of servicemembers’ special obligations to remain current on debts. Both active duty and former servicemembers could encounter trouble with the company if they missed or were late on payments. Once servicemembers defaulted, they became subject to repeated threats to contact their chain of command. In many other instances, the company exaggerated the consequences of not paying. Thousands of people were victims of the company’s aggressive tactics. Specifically, the CFPB alleged that the company:
Enforcement Action
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