The CFPB took enforcement action against ACE Cash Express, one of the largest payday lenders in the U.S., last week in a case alleging the lender harassed and pressured overdue borrowers into taking out more loans.
CFPB Director Richard Cordray said the lender allegedly “bullied” borrowers into “a cycle of debt.”
“This culture of coercion drained millions of dollars from cash-strapped consumers who had few options to fight back,” Cordray said. “The CFPB was created to stand up for consumers and today we are taking action to put an end to this illegal, predatory behavior.”
As part of the enforcement action, ACE has been ordered to pay $5 million to consumers in the form of refunds and $5 million in penalties.
Based in Irving, Texas, ACE offers payday loans check-cashing services, installment loans, title loans and other products at 1,500 retail stores across 36 states.
According to the CFPB’s complaint, ACE allegedly threatened to sue borrowers if they did not make payments, threatened extra fees and to report consumers to credit reporting agencies and made an excessive number of phone calls to borrowers behind on payments.
The action—resulting from an examination conducted in coordination with the Texas Office of Consumer Credit Commissioner—is just one of several taken against payday lenders, which the CFPB began supervising in January 2012.