ACE Cash Express agrees to $10 million settlement with federal agency
07/10/2014 5:08 PM
07/10/2014 5:09 PM
The Consumer Financial Protection Bureau announced Thursday it had reached a settlement with ACE Cash Express, and that the Texas-based payday lender had agreed to pay a $5 million penalty and $5 million in refunds.
ACE Cash Express operates stores in 35 states, including seven stores in Wichita, according to the company’s website.
The federal CFPB had accused ACE Cash Express of using illegal debt collection practices to pressure borrowers into taking out additional payday loans.
“ACE used false threats, intimidation, and harassing calls to bully payday borrowers into a cycle of debt,” CFPB Director Richard Cordray said in the release.
The company said in a statement Thursday that the allegations “relate exclusively to some of ACE’s collections practices prior to March 2012.”
The company also said in the statement that it has fully cooperated with the CFPB and that it hired Deloitte Financial Advisory Services to review a “statistically significant, random sample” of collections calls its employees made between March 2011 and February 2012. From that review, the company said 99.5 percent of customers with a loan in collections for more than 90 days did not take out a new loan with ACE within two days of paying off their existing loan, and 99.1 percent of customers did not take out a new loan within 14 days of paying off their existing loan.
“We settled this matter in order to focus on serving our customers and providing the products and services they count on,” Jay Shipowitz, CEO of ACE Cash Express, said in the statement.
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