CFPB fines Tennessee payday lender over claims it misled borrowers
WASHINGTON — The Consumer Financial Protection Bureau has hit a Tennessee-based small-dollar lender with a consent order alleging the company deceived customers in collection letters.
Cash Express LLC, of Cookeville, Tenn., allegedly sent borrowers threats of legal action even though the time for taking legal action had expired. It was also not the company’s practice to file lawsuits against consumers in these situations, the CFPB said in a press release.
Under the consent order issued Wednesday, the company — which operates retail lending outlets in Tennessee, Kentucky, Alabama and Mississippi — will pay a $200,000 civil money penalty and about $32,000 in compensation to customers.
Cash Express declined to comment on the settlement.
Up until April 2016, Cash Express had mailed more than 19,000 collection letters to 11,315 consumers who still owed debts, even though the legal period of enforcement had elapsed, the CFPB said. The majority of the letters threatened legal action, with some even including drafts of court documents and listing response deadlines, according to the bureau’s consent order.
The CFPB also found that Cash Express had implied in collection letters, loan applications and agreements that it would report negative credit information to credit reporting agencies, even though the business did not actually provide customer information to these agencies.