The Consumer Financial Protection Bureau has settled with Cash Tyme, a payday retail lender, over consumer financial protection and other violations.
According to the settlement, Cash Tyme violated the the Consumer Financial Protection Act of 2010 by failing to take adequate steps to prevent unauthorized charges and failing to promptly monitor, identify, correct, and refund overpayments by consumers.
Additionally, the payday lender made collection calls to third parties named as references on borrowers’ loan applications that disclosed or risked disclosing the debts to those third parties, including to borrowers’ places of employment as well as to third parties who were themselves harassed by such calls, the bureau said.
It also misrepresented that it collected third-party references from borrowers on loan applications for verification purposes, when in fact it was using that information to make marketing calls to the references.
Cash Tyme also used misleading advertisements on its storefronts, using promises of unavailable services, including check cashing, phone reconnections, and home telephone connections, to attract customers. The storefronts’ outdoor signage contained information that was likely to be deemed important by consumers and likely to affect their conduct or decision regarding visiting a Cash Tyme store, the bureau said.
Also, the CFPB found that Cash Tyme violated the Gramm-Leach-Bliley Act and Regulation P by failing to provide initial privacy notices to borrowers.
Cash Tyme violated the Truth in Lending Act and Regulation Z when it failed to include a payday loan fee charged to Kentucky customers in the annual percentage rate in loan contracts and advertisements, and rounded APRs to whole numbers in advertisements. It also violated TILA and Reg Z when it published advertisements that included an example APR and payment amount that was based on an example term of repayment, without disclosing the corresponding repayment terms it had used to calculate that APR.
Under the terms of the consent order, Cash Tyme must, among other provisions, pay a civil money penalty of $100,000.
Cash Tyme is the operating name for CMM, LLC, and its wholly owned subsidiaries in Alabama, Florida, Indiana, Kentucky, Louisiana, Mississippi, and Tennessee.