Education News Simulator Your Money Advisors Academy News Personal Finance News CFPB Sues ACE Cash Express accusing them of concealing free Repayment Plans It also states they believe that the company that lends money to payday lenders unlawfully erased customer funds. By Ben Luthi The article was published on July 14, 2022. The Consumer Financial Protection Bureau (CFPB) launched a lawsuit Tuesday against ACE Cash Express. The federal agency claims that the payday lender has generated $240 million or more in fee for reborrowing from customers who qualified for free repayment plans . The lender also made false statements about the number of times it was attempting to debit the bank accounts of borrowers. Most important Takeaways The CFPB has filed suit against payday lender ACE Cash Express for charging charges that are illegal and illegal withdrawals from borrowers' accounts. A federal agency has stated that the lender is a repeat offender, citing a 2013 enforcement decision that resulted in $1 million in fines and loans to the borrower being refunded. The CFPB seeks monetary relief for consumers that are in need of injunctive or injunctive relief. They also want penalties, as well as disgorgement and compensation for unjust gains. The CFPB's Lawsuit Against ACE Cash Express ACE Cash Express is a payday lender which offers title loans and check cashing as well as bill pay , and a variety others financial services.1 The way they handle payday loans is what brought on a lawsuit filed by the CFPB. The agency claims that the lender has broken federal law. More specifically: Covering free repayment plans In 10 states, clients are entitled to the option of a free repayment plan each year. It lets them pay four equal installments , instead of one lump sum. This comes with no additional fees or interest. Instead of informing consumers of this opportunity, ACE Cash Express told its customers that they could only choose only a limited grace period or a fee-based refinance. The CFPB affirms that the company has received at least $240million in fees from these borrowers in 2014. Illegally withdrawing money: In many states payday loan contracts state that the lender may attempt withdrawal of repayments up to three times. However the CFPB states the following: ACE Cash Express has made an unauthorised fourth withdrawal at least 3,000 instances since 2016 and resulted in $1.3 million in cash which was debited illegally. 2 The CFPB also cites an enforcement action it took at ACE Cash Express in 2014 The payday lender that it would stop pushing consumers into cycle after cycle of debt as well as other unlawful debt collection practices.3 The lender stated in a press release that the lawsuit was invalid, claiming that improper withdrawals only affected 0.028 percent of the borrowers, and that more than 140,000 people have used the option of a payment plan which they claim is proof that customers know about the option.4 Sponsored Reliable, Simple, Innovative CFD Trading Platform You are looking for a trustworthy CFD trading option? As Germany's No. 1 CFD Provider (Investment Trends to 2022) Plus500 is a CFD licensed provider whose platform is secured through SSL. 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How Does It Work, How to get One, and Legality Payday loans are a type of loan that is payday loan is a type temporary borrowing, wherein a lender will give you credit at high-interest based on your income. more Student Debt Definition Student debt refers to loans used to pay for the tuition fees at college that become due once the student is finished or leaves school. More Regulation B (Reg B) in the Equal Credit Opportunity Act (ECOA) Regulation B describes the regulations that lenders need to adhere to when they seek and process credit information. More Consumer Financial Protection Act The Consumer Financial Protection Act of 2010 established the Consumer Financial Protection Bureau (CFPB). more What Is what is the Equal Credit Opportunity Act (ECOA)? Scope The Equal Credit Opportunity Act (ECOA) is a federal civil rights legislation that prohibits lenders to deny credit to a person based on any factor unrelated in the person's capacity to pay back. 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