On November 25, the Consumer Financial Protection Bureau announced settlements with a military travel lender, its principal, and the servicer of its loans. The now defunct Edmiston Marketing, LLC, operating under the name of Easy Military Travel, provided financing to military servicemembers and their families for the purchasing of airline tickets. The CFPB determined that Easy Military Travel and its principal, Brandon Edmiston, violated the Consumer Financial Protection Act of 2010 by misrepresenting the true credit cost of financing the purchase of airline tickets and by improperly disclosing a finance charge.
Furthermore, the CFPB concluded that Easy Military Travel failed to provide to consumers: certain credit information required by the Truth in Lending Act and its Regulation Z, such as the amount financed and the total number of payments; and the total cost of purchasing airline tickets through financing as required by the Telemarketing Sales Rule (“TSR”).
The CFPB concluded that Edmiston “provided substantial assistance to Easy Military Travel’s violations of the CFPA and the TSR,” and that he directed Easy Military Travel representatives to quote “falsely low monthly interest rates over the telephone to consumers.”
USA Service Finance, LLC (“USASF”) services travel-related loans for servicemembers, including loans issued by Easy Military Travel. The CFPB found that USASF violated the CFPA’s prohibition against deceptive practices “by overcharging servicemembers and their families for a debt-cancellation product for loans financing airline tickets made by Easy Military Travel and purchased and serviced by USASF.” The CFPB also concluded that USASF violated Regulation V, which implements the Fair Credit Reporting Act, by failing at any point to establish, review, or update “any written policies or procedures regarding the accuracy and integrity of the consumer information it furnished to consumer reporting agencies.”
While the consent order against Easy Military Travel and Edmiston provides for a $3,468,224 judgment, the full payment will be suspended contingent upon them completing certain obligations. The consent order also requires Easy Military Travel and Edmiston to pay restitution to certain servicemembers and their families who paid the hidden finance charge, plus a civil money penalty of $1. It further prohibits any future targeting of servicemembers and their families with consumer lending services.
The consent order against USASF requires it to pay$54,625 in cash restitution to overcharged borrowers with no outstanding balance on their loans, plus an undefined amount in credits to overcharged borrowers with outstanding balances. USASF also is to pay $25,000 in a civil money penalty to the CFPB.
The consent order also “prohibits USASF from collecting on or selling the travel loans purchased from Easy Military Travel,” and requires it to “establish and update reasonable written policies and procedures for the accuracy and integrity of consumer information it furnishes to consumer reporting agencies.”