CFPB trims Moneytree
The CFPB has announced it issued a consent order against Moneytree, Inc., a financial services company that offers payday loans and check-cashing services, for misleading consumers with deceptive online advertisements and collections letters. The company also made unauthorized electronic transfers from consumers’ bank accounts. The CFPB has ordered the company to cease its illegal conduct, provide $255,000 in refunds to consumers, and pay a civil penalty of $250,000. The Bureau found that Moneytree:
- Used deceptive online ads. In early 2015, Moneytree ran advertisements online offering to cash consumers’ tax refund checks for “1.99.” The actual fee for the service was 1.99 percent of the amount of the check cashed, rather than $1.99, as the company’s advertisements implied. Consumers were required to visit one of Moneytree’s physical branches to take advantage of the advertisement’s offer, which appeared online tens of thousands of times.
- Deceptively told consumers their vehicles could be repossessed. From late 2014 through early 2015, Moneytree mailed letters to hundreds of consumers indicating that their vehicles could be repossessed if they did not make past-due payments on their installment loans. But none of these consumers had loans secured by their vehicles, and Moneytree had no right or ability to repossess them.
- Withdrew money from consumers’ accounts without authorization. Moneytree failed, in over 700 instances, to obtain preauthorization from consumers for withdrawals from their bank accounts, in violation of the Electronic Fund Transfer Act and Regulation E.