CFPB sues Ohio-based auto loan company

The Consumer Financial Protection Bureau is suing an Ohio-based auto loan company for allegedly using aggressive threats and deceptive claims to collect debts for military service members.

CFPB Director Richard Cordray said Security National Automotive Acceptance Company (SNAAC), which operates in more than two-dozen states, took advantage of military rules to pressure service members to pay their debts.

“For all the security they provide us, service members should not have their financial and career security threatened by false information from an auto loan company.”

The company is accused of exaggerating potential disciplinary actions that service members would face, contacting and threatening to contact commanding officers, falsely threatening to garnish service members’ wages and misleading military personnel about imminent legal action.

CFPB claims the company violated Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits financial companies from using unfair, deceptive and abusive practices to collect debts.

The agency alleges once a service member missed or was late on a loan payment, they became subject to repeated threats from SNAAC.

In a statement Thursday, SNAAC said it’s surprised by the lawsuit and noted that the complaint is not a finding or ruling that the company violated any law.

“In fact, we were in active discussions with CFPB to better understand and resolve their concerns when we received news about the suit,” the company said. “Nevertheless, we remain willing to work with them to resolve this matter as quickly as possible while continuing to proudly serve our military customers.”

SNAAC went onto to say it’s cooperated fully with CFPB, which first asked to review its policies two years ago, and voluntarily adjusted some of its processes to provide customers with the very best service. 

“We’ve done this despite our strong belief that our servicing efforts – both then and now – have complied with applicable law and were consistent with the creditor processes outlined by the Department of Defense,” the company said.

This story was updated at 5:45 p.m. Thursday to include statements from SNAAC.