BOSTON – More than 17,000 military-service members and consumers throughout the country targeted by a predatory lending scheme will receive $92 million in debt relief under a settlement filed last week involving Massachusetts, the federal Consumer Financial Protection Bureau and 12 other states, Attorney General Martha Coakley announced.
The settlement with Colfax Capital Corp. and Culver Capital LLC – collectively known as Rome Finance – will provide an estimated $650,000 in relief to more than 90 Massachusetts service members currently subject to the deceptive lending contracts with the company for electronic goods.
California-based Colfax offered credit to consumers purchasing electronic goods typically sold at mall kiosks near military bases or online retailers, with the promise of instant financing with no money down. When making purchases, service members and other consumers filled out a credit application to get approved for financing agreements. In some cases, the company was the initial creditor, or agreed to buy the financing contracts from merchants who sold the goods.
In the settlement, the regulators allege that the company fraudulently and illegally financed these consumer purchases for military members, allegedly failing to provide accurate disclosures for payments, and deceptively understated or hid high interest rates on the loans.
Other states involved in the settlement were Colorado, Delaware, Florida, Georgia, Kentucky, Indiana, Iowa, Michigan, New York, North Carolina, Tennessee and Vermont. •