Actions taken against military, mortgage scammers by CFPB
April 21, 2015
WASHINGTON (4/22/15)--The Consumer Financial Protection Bureau has taken action against two scammers this week, one for charging servicemembers hidden fees and another against a mortgage servicing company.
The bureau took action against Fort Knox National Co. and its subsidiary Military Assistance Co. (MAC) Monday. It's alleged that the companies charged millions to servicemembers in hidden fees as a military allotment processor. The military allotment system allows servicemembers to deduct payments directly from their earnings.
With MAC, servicemembers would set up an allotment that transferred a portion of their pay into a pooled bank account controlled by MAC. Servicemembers would then pay MAC a monthly service charge to have MAC make monthly payments to a creditor out of the account. It is alleged that MAC charged recurring, undisclosed fees against those residual balances, draining tens of thousands of accounts.
Under the terms of the consent order filed today, Fort Knox National Co. and MAC are required to provide about $3.1 million in relief to harmed servicemembers.
On Tuesday, in conjunction with the Federal Trade Commission, the CFPB took action against Green Tree Servicing, LLC. It is alleged Green Tree failed to honor modifications for loans transferred from other servicers, demanded payments before providing loss mitigation options, delayed decisions on short sales and harassed and threatened overdue borrowers.
According to the bureau, Green Tree has agreed to pay $48 million in restitution to victims and a $15 million civil money penalty for its illegal actions.