The CFPB announced that it has entered into a consent order with Moneytree, Inc. to settle allegations that the company engaged in deceptive advertising, sent consumers deceptive collection letters, and did not obtain written authorization for electronic repayments.  The consent order requires the company to pay approximately $255,000 in consumer redress and a civil money penalty of $250,000 to the CFPB.

According to the consent order (whose findings of fact and conclusions of law are neither admitted or denied by Moneytree), the company engaged in deceptive acts or practices in violation of the Consumer Financial Protection Act’s UDAAP prohibition by (1) running online advertisements that advertised the company would cash tax-refund checks at its locations for “1.99,” thereby expressly or impliedly representing a fee of $1.99 when the company’s actual check cashing fee was 1.99 percent of the check amount, and (2) sending collection letters to consumers who were delinquent on unsecured installment loans that referred to the loans as “title loans” and stated that the loans would be reviewed for repossession if the consumer did not make past due payments or missed another payment.  (The company subsequently sent consumers who received such letters another letter stating that the prior collection letters referencing a title loan were produced in error and should be disregarded.)  The consent order also found that the company violated the EFTA and Regulation E by making electronic withdrawals from consumers’ accounts for loan repayments without obtaining written authorization for the withdrawals.

In addition to prohibiting the company from engaging in similar future conduct and requiring it to pay a $250,000 civil money penalty, the consent order requires the company to reserve or deposit $255,016.45 in a segregated account to be distributed to affected consumers.  Under the order, any consumer who cashed a tax refund check at one of the company’s locations will receive a refund of the 1.99% fee paid less $1.99; any consumer who received a collection letter referring to his or her loan as a title loan will receive a refund of any payments made before the company sent the corrective letter; and any consumer who was assessed a fee by his or her bank for electronic payments withdrawn without written authorization will be reimbursed for such fees.