- Associated Press - Thursday, December 18, 2014

RALEIGH, N.C. (AP) - North Carolina’s attorney general has ordered a company he says targeted military families with unfair practices to forgive debts and pay refunds.

Roy Cooper joins Virginia’s attorney general’s office and the Consumer Financial Protection Bureau to file a complaint and judgment in federal court against Freedom Furniture, Inc., its affiliated businesses and its owners for violating laws regarding credit and debt collection.

The company sells furniture, electronics and jewelry online at 14 locations near military bases, including Fort Bragg.

Under the judgment, the three companies will pay more than $2.5 million in consumer relief and $100,000 in civil penalties. Consumer relief includes $2.2 million in debt forgiveness and more than $373,000 in refunds for consumers who had default judgments entered against them.

An investigation showed that the companies affiliated with Freedom Furniture often double-billed customers for monthly payments.

According to Cooper’s office, the companies tried to forecast when customers’ military allotments would stop or be insufficient to cover the payment owed and then used the backup payment method instead. The information the companies used to make their prediction wasn’t always reliable, yet they went ahead with collecting backup payments. That resulted in some consumers paying double the amount owed in a single billing cycle, and some paid overdraft fees as well.

According to the complaint, collectors for the companies sometimes contacted service members’ commanding officers about their debts, which could harm their opportunities for promotion. They also routinely filed lawsuits in Virginia courts against North Carolina consumers, even though state law requires that debt collection suits be brought in the county in North Carolina where the debt occurred.

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