The Consumer Financial Protection Bureau (CFPB) settled with SMART Payment Plan, LLC (SMART) regarding alleged deceptive sales practices.
SMART is an Austin, Texas-based company that operates a loan payment program for auto loans known as the SMART plan. The plan would deduct payments from consumer’s bank account every two weeks and then forward the payments to the consumer’s lender on a monthly basis.
“SMART provided consumers individualized ‘benefits summaries’ that purported to state a specific amount of interest savings or other money savings consumers would get by enrolling in the SMART Plan, but SMART’s fees would ordinarily exceed the savings,” CFPB stated in a release.
Because consumers would not actually be saving any money because of the company’s fees, SMART’s disclosures were misleading statements in violation of the Consumer Financial Protection Act, the bureau said
The consent order requires SMART to pay $7.5 million in consumer redress, but the full amount is suspended so long as the company pays $1.5 million by Dec. 31, 2020 and a $1 civil money penalty to the bureau. The bureau said the suspension is based on SMARTS inability to pay the full redress, as shown by sworn financial statements.
“Harmed consumers may be eligible for additional relief from the bureau’s civil penalty fund,” CFPB stated.
The consent order also prohibits SMART from making any more misrepresentations regarding its payment programs and requires it to account for the total costs for the programs it offers, including an accurate calculation of net savings or costs after its fees."smart" - Google News
November 07, 2020 at 03:16AM
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