Payday lender Moneytree agrees to $500K federal fine over deceptive practices
Moneytree, a payday lender, has entered a consent order with the U.S. Consumer Financial Protection Bureau, agreeing to pay more than $500,000 in fines for allegedly engaging in deceptive advertising and collection practices.
The allegations stem from a variety of things, including advertising about the company’s tax-refund check cashing, the Seattle Times reports. In 2015, the Seattle-based company advertised that it would cash tax-return checks for “1.99, which some consumers assumed meant $1.99. However, it was actually charging 1.99 percent of each tax return cashed. “A reasonable consumer viewing [the ad] without a percent sign could assume that the price referred to a flat fee,” the CFPB wrote in the consent order (PDF).
The business, which makes short-term consumer loans, is also accused of sending debt collection letters that threatened to repossess consumers’ vehicles. The customers were delinquent on loans, the newspaper reports, but they never signed over vehicle titles when the loans were made.
At least 151 people paid back their debts after those letters, although Moneytree later notified them to disregard the threat.
Also, the CFPB found that Moneytree withdrew money from customers’ bank accounts without getting written authorization. Moneytree described that as a paperwork error, according to the Seattle Times, and the money was refunded.
Out of the $505,000 fine assessed by the federal agency, $255,000 will be set aside for customer refunds, the order states.
