A payday retail lender ("Cash Tyme") with outlets in several U.S. states (i.e., Alabama, Florida, Indiana, Kentucky, Louisiana, Mississippi and Tennessee) entered into a Consent Order with the Consumer Financial Protection Bureau ("CFPB") for alleged violations of (i) the Consumer Financial Protection Act ("CFPA"), (ii) the Gramm-Leach-Bliley Act ("GLBA") and Regulation P, and (iii) the Truth in Lending Act ("TILA") and Regulation Z.
According to the CFPB Consent Order, Cash Tyme violated the CFPA by:
- failing to take sufficient steps to prevent unauthorized charges;
- neglecting to "promptly monitor, identify, correct, and refund overpayments by consumers;"
- making "collection calls to third parties" named as references on borrowers' loan applications that "disclosed or risked disclosing the debts to those third parties";
- using third-party references from borrowers on loan applications to make marketing calls to the references; and
- advertising services that were unavailable, including check cashing, phone reconnections and home telephone connections.
The CFPB alleged that Cash Tyme violated the GLBA and Regulation P by failing to provide certain consumers with initial privacy notices. In addition, the CFPB claimed that Cash Tyme violated the TILA and Regulation Z by failing to accurately disclose the annual percentage rate of loan products "before consummation of the transaction" and in advertisements.
The CFPB ordered Cash Tyme to, among other things, pay a civil monetary penalty of $100,000.
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