Calling individuals listed as references and employers on payday loan applications as a means of trying to collect on unpaid debts — among other violations — has netted a payday lender a $100,000 fine and a consent order with the Consumer Financial Protection Bureau.
The CFPB announced the settlement with Cash Tyme, the operating name for a series of companies called CMM that operated in Alabama, Florida, Indiana, Kentucky, Louisiana, Mississippi, and Tennessee.
Along with repeatedly contacting third parties, including employers, friends, and family members of customers in attempts to either convey a message about making a payment or even asking the third party to make a payment on behalf of the customer, Cash Tyme was also accused of:
- Failing to monitor and correct when customers overpaid their loans
- Advertised services it did not offer, such as check cashing and phone reconnection
- Using the information it obtained about third-party references and marketing its products and services to those third parties
- Failing to provide initial privacy notices to customers
The company did not maintain an internal do-not-call list, either, the CFPB alleged. When it received a request not to contact an individual, a notation was supposed to be made in the customer’s file, which, according to the CFP, was “prone to errors.” Cash Tyme was accused of making the third-party collection calls between January 2014 and February 2017.
In addition to paying the fine, the company is prohibited from misrepresenting the products it offers, misrepresenting what it will do with the third-party reference information that customers provide on applications, and making collection calls to third parties.