In addition to the settlement with USAA on January 3, 2019, the CFPB has made settlements with five other entities already in 2019. Headquartered in Akron, Ohio, Sterling Jewelers operates over 1.500 jewelry stores under several names, including Kay Jewelers, Jared The Galleria of Jewelry, JB Robinson Jewelers, Marks & Morgan Jewelers, Belden Jewelers, Goodman Jewelers, LeRoy’s Jewelers, Osterman Jewelers, Rogers Jewelers, Shaw’s Jewelers, and Weisfield Jewelers.
Sterling Jewelers, Inc.
On January 16, 2019, the CFPB settled with Sterling Jewelers Inc. The claim found that Sterling violated the Consumer Financial Protection Act of 2010 by opening store credit-card accounts without customer consent; enrolling customers in payment-protection insurance without their consent; and misrepresenting to consumers the financing terms associated with the credit-card accounts. The Bureau also found that Sterling violated the Truth in Lending Act by signing customers up for credit-card accounts without having received an oral or written request or application from them. The State of New York found that Sterling violated several provisions of state law. As part of the settlement, Sterling is required to pay a $10 million civil money penalty to the Bureau and a $1 million civil money penalty to the State of New York. Sterling has also agreed to injunctive relief designed to prevent the continuation of the claimed illegal conduct.
Broker of High-Interest Credit Offers
On January 23, 2019, the CFPB settled with Mark Corbett, a broker of contracts offering high-interest credit to veterans. In their release, the CFPB explains that Corbett violated the Consumer Financial Protection Act of 2010 by misrepresenting to consumers that the contracts he facilitates are valid and enforceable when, in fact, the contracts are void because veterans’ pension payments are unassignable under federal law; misrepresenting to consumers that the offered product is a purchase of payments and not a high-interest credit offer; misrepresenting to consumers when they will receive their funds; and failing to disclose to consumers the applicable interest rate on the credit offer. As part of the settlement, Corbett is permanently banned from brokering between veterans and third parties and must pay a civil money penalty of $1 - which is an amount that accounts for Corbett’s inability to pay more based on sworn financial statements that he provided to the CFPB.
Enova International, Inc
On January 25, 2019, the CFPB announced a settlement with Enova International, Inc. Enova is an online lender that is based in Chicago, IL and extends unsecured payday and installment loans and lines of credit. In their release, the CFPB explained that Enova violated the Consumer Financial Protection Act of 2010 by debiting consumers’ bank accounts without authorization. While consumers authorized Enova to deduct payments from certain accounts, the company in many instances debited different accounts that the consumers had not authorized it to use. The Bureau found also that Enova failed to honor loan extensions it granted to consumers. As part of the settlement, Enova must pay a $3.2 million fine and is barred from making or initiating electronic funds transfers without valid authorization.
NDG Financial Corporation
On February 1, 2019, the CFPB announced a settlement with NDG Financial Corporation and several associated businesses located in Canada and Malta. In their complaint, the CFPB alleged that the companies violated the Consumer Financial Protection Act of 2010 by misrepresenting to consumers in states where loans offered by the defendants violated state licensing or usury laws that they were obligated to repay loan amounts when such an obligation did not exist because state law voided the loan.
The CFPB explained that the companies also:
Misrepresented that the loan agreements were not subject to United States federal or state law;
Misrepresented that non-payment of debt would result in lawsuits, arrests, imprisonment, or wage garnishment; and
Conditioned loan agreements upon irrevocable wage assignment clauses, which the Bureau alleges violated the Credit Practices Act.
As part of the settlement, the defendants are barred from many consumer loan activities.
On February 5, 2019, the CFPB released a settlement statement with Cash Tyme, a payday retail lender, saying that the lender failed to prevent overcharges, made harassing collection calls to borrowers’ references, and did not take adequate steps to prevent unauthorized charges. In addition, the CFPB stated that Cash Tyme advertised unavailable services, violated Regulation P/GLBA by failing to provide initial privacy notices to borrowers, violated Regulation Z by failing to include a payday loan fee in the APR calculation, rounded the APR to whole numbers in advertisements, and advertised APRs without disclosing the corresponding repayment terms it had used to calculate that APR. As part of the settlement, Cash Tyme must pay a $100,000 fine.
The settlement with Sterling Jewelers, Inc. can be found here.
Information on the settlement with the broker of high-interest credit offers can be found here.
Information on the Enova settlement can be found here.
Information on the settlement with NDG Financial Corporation can be found here.
Information about the settlement with Cash Tyme can be found here.