The Consumer Financial Protection Bureau (CFPB) and 13 state attorneys general announced Tuesday that obtained approximately $92 million in debt relief from Colfax Capital Corporation and Culver Capital, collectively known as “Rome Finance,” for about 17,000 U.S. service members and other consumers injured by the company’s predatory lending scheme.
According to the bureau, Rome Finance enticed consumers with false promises. After the customer was on the hook, Rome Finance then masked expensive finance charges.
“Rome Finance’s business model was built on fleecing servicemembers,” said CFPB Director Richard Cordray. “Rome Finance lured servicemembers in with the promise of financing, then masked the finance charges."
According to the bureau, the company strategically placed its business near military bases with the intent to target the base’s inhabitants.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions or individuals engaging in unfair, deceptive, or abusive acts or practices.
The companies will be required to pay restitution for their deception and are permanently banned from consumer lending.