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Lender Facing Suit From CFPB for Unfair Debt Collection

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Security National Automotive Acceptance Company (SNAAC) today for unfair debt collection practices.

Here is what you need to know:

SNAAC Tactics

Security National Automotive Acceptance Company is an auto loan company that specializes in providing service members with loans to buy used cars.

When customers defaulted on loans, SNAAC allegedly used unfair, deceptive, and abusive practices to induce payments for the loans. In its lawsuit, CFPB alleges that SNAAC often exaggerated the consequences of being delinquent on a loan. SNAAC would lie and tell servicemembers that they could face demotion, loss of promotion, discharge, or reassignment. In fact, the likelihood of such consequences were non-existent.

SNAAC also repeatedly contact servicemembers' commanding officers to demand payments of delinquent loans. In such communications, SNAAC allegedly lied and suggested that borrowers were in violation of the Uniform Code of Military Justice and could be subject to discipline.

CFPB to the Rescue

Under the Consumer Financial Protection Act (CFPA), the protection bureau has the authority to "take any action authorized ... to prevent a service provider from committing or engaging in an unfair, deceptive, or abusive act or practice."

An act or practice may be unfair if it "causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers," and abusive if it "takes unreasonable advantage of a lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service."

The CFPB contends that SNAAC violated the CFPA when they lied about possible repercussions and contacted servicemembers' commanding officers. The lawsuit wants compensation for harmed borrowers, a civil penalty, and an injunction on the company's practices.

If you've been harmed by a debtor's abusive practices, consult with an experienced consumer protection attorney for help.

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