- Associated Press - Saturday, October 31, 2015

CINCINNATI (AP) - An Ohio-based lender that primarily loans money to active duty and former military service members to buy vehicles engaged in illegal debt collection practices and must pay more than $3 million, a federal agency said.

Under an administrative order, Security National Automotive Acceptance Co. must refund or credit about $2.28 million to service members and other consumers allegedly harmed and pay a $1 million penalty, the Consumer Financial Protection Bureau said in a statement this past week.

A separate court order bans the lender from using aggressive tactics -such as exaggeration, deception and threats to contact commanding officers - to coerce service members into making payments, the bureau said.

“Service members should not be forced to pay because a debt collector used deceptive pressure tactics,” bureau Director Richard Cordray said.

The company, based in the Cincinnati suburb of Mason, operates in more than two dozen states.

In a statement, the lender said it agreed to the settlement in response to the bureau’s complaint but admitted no wrongdoing.

“Despite our strong disagreement with the CFPB’s complaint, the cost and distraction of continuing to fight this was simply not in the best interests of our customers, associates or shareholders,” the company said.

The bureau alleged that when consumers defaulted on their loans, the company used aggressive collection tactics.

“Thousands of people were victims of the company’s aggressive tactics,” the bureau said.

The company has said that the total number of affected customers is about 2,200, or less than 2 percent of their customers over the past few years.

The federal agency said some of the company’s tactics included telling military customers that failure to pay could result in consequences, including demotion, discharge or loss of security clearance.

Those consequences were extremely unlikely, the bureau said.

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