WASHINGTON (Legal Newsline) — A payday retail lender operating in several states has settled charges by the federal government of failing to prevent overcharges, making harassing collection calls to borrowers' references and falsely advertising services that the company did not really offer.
According to the Consumer Financial Protection Bureau on Feb. 5, Cash Tyme - which operates in Alabama, Florida, Indiana, Kentucky, Louisiana, Mississippi and Tennessee as CMM LLC, along with its subsidiaries - violated the Consumer Financial Protection Act of 2010.
The bureau alleges Cash Tyme did not correct, monitor or refund customer overpayments, made collection calls to third parties that revealed borrowers' debts and falsely marketed services such as phone reconnections and check cashing on its storefront signage.
The bureau also alleges Cash Tyme failed to give privacy notices to customers and did not include loan fees to customers in some states in the annual percentage rate (APR) on its contracts. In some cases, the company "rounded APRs to whole numbers" on its ads without listing the correct terms the APR would be calculated, the bureau said.
The settlement includes Cash Tyme paying a $100,000 civil penalty, the bureau said.