In addition, Moneytree must pay $250,000 in civil money penalty.
The CFPB’s release said the following:
- “Used deceptive online ads: In early 2015, Moneytree ran advertisements online offering to cash consumers’ tax refund checks for ‘1.99.’ The actual fee for the service was 1.99 percent of the amount of the check cashed, rather than $1.99, as the company’s advertisements implied. Consumers were required to visit one of Moneytree’s physical branches to take advantage of the advertisement’s offer, which appeared online tens of thousands of times.”
- “Deceptively told consumers their vehicles could be repossessed: From late 2014 through early 2015, Moneytree mailed letters to hundreds of consumers indicating that their vehicles could be repossessed if they did not make past-due payments on their installment loans. But none of these consumers had loans secured by their vehicles, and Moneytree had no right or ability to repossess them.”
- “Withdrew money from consumers’ accounts without authorization: Moneytree failed, in over 700 instances, to obtain preauthorization from consumers for withdrawals from their bank accounts, in violation of federal law.”
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The Consumer Financial Protection Bureau ordered payday loan provider Moneytree to pay $255,000 to consumers after allegations of deceptive advertisements, collection letters and withdrawal of money from consumers with authorization, according to JD Supra Business Advisor.