US financial regulators order $500k fine against payday lender Moneytree

U.S. financial regulators have taken aim at a payday lender that operates in Las Vegas and other Western cities, ordering it to pay more than $500,000 in refunds and penalties.

The Consumer Financial Protection Bureau on Friday filed a consent order against Moneytree for “misleading” consumers with “deceptive” online ads and collection letters and for transferring funds from consumers’ bank accounts without their consent hundreds of times, the agency announced.

Seattle-based Moneytree, which has 22 branches in the Las Vegas Valley, according to its website, ran ads online early last year that offered cashing of tax refund checks for “1.99.” But the actual service fee was 1.99 percent of the amount cashed, not $1.99, the consumer watchdog alleged.

The company also “deceptively” told borrowers that their cars could be repossessed, the agency claimed. From late 2014 through early 2015, Moneytree sent letters to hundreds of people indicating that their vehicles could be seized if they did not make past-due payments on their installment loans. But “none of these consumers had loans secured by their vehicles, and Moneytree had no right or ability to repossess them,” the bureau said.

Additionally, the agency says, Moneytree withdrew money from customers’ bank accounts without their authorization “in over 700 instances.”

The bureau said it had ordered the lender “to cease its illegal conduct,” provide $255,000 in customer refunds and pay a civil penalty of $250,000.

“Consumers deserve honesty and transparency from the financial institutions they rely on,” agency Director Richard Cordray said in a statement. “Moneytree’s practices meant consumers were making decisions based on false and deceptive information, and today’s action will give the company’s customers the redress they are owed.”

Moneytree, founded in 1983, has branches in Nevada, California, Idaho, Colorado, Washington state and British Columbia, Canada.

In a statement, Moneytree said that the allegations stemmed from “unintended and isolated process errors” at the company and that it had settled “without regard to a showing of actual harm to consumers.”

The company said it conducts millions of transactions per year through its retail network. The number of consumers “possibly impacted” by the errors amounted to about “1/1000 of 1 percent” of its annual transaction volume, though it still “takes these matters very seriously.”

“Our customers are our singular focus at Moneytree,” CEO Dennis Bassford said in the statement. “And we look forward to continuing our tradition of exceeding their expectations.”

Contact Eli Segall at 702-383-0342 or esegall@reviewjournal.com. Follow @eli_segall on Twitter.