The Consumer Financial Protection Bureau is taking action against Security National Automotive Acceptance Company, an automotive lender present in 30 states that works mostly with active-duty and retired military personnel, for its "aggressive debt collection" tactics towards delinquent borrowers.
According to Military Times, SNACC ran afoul of the Consumer Financial Protection Act of 2010 after it threatened the career prospects or tax liability of the borrowers and misrepresented its ability to garnish wages and take legal action. The lender also threatened, or in some cases actually did, contact commanding officers to try and obtain payment.
If the CFPB's suit is successful, borrowers will be compensated if they claim they were harmed, while SNACC will also face a civil penalty, MT reports.
In announcing the lawsuit, CFPB Director Richard Cordray said SNACC, "took advantage of military rules to put enormous pressures on service members to pay their debts. For all the security they provide us, service members should not have their financial and career security threatened by false information from an auto loan company."