Troops allegedly misled by car loan program to get refunds

[unhappycamper]

http://www.mcclatchydc.com/2013/06/27/195222/troops-allegedly-misled-by-car.html

Troops allegedly misled by car loan program to get refunds
By Lindsay Wise | McClatchy Washington Bureau
Posted on Thursday, June 27, 2013

WASHINGTON — U.S. Bank and a Kentucky-based financial services provider agreed to refund $6.5 million to 50,000 military service members after federal regulators accused both companies of misleading borrowers about fees and costs associated with an auto loans program that targeted active-duty troops.

U.S. Bank, headquartered in Minneapolis, along with its partner, Dealers’ Financial Services of Lexington, Ky., violated the law by engaging in deceptive marketing and lending practices, regulators with the Consumer Financial Protection Bureau alleged Thursday.

The auto loan program created by the two companies – the Military Installment Loans and Educational Services program – was designed to appeal to young service members who were new to the car-buying process and had little or no credit history. It required them to make payments on subprime loans through the military’s so-called “discretionary allotment system,” a process that automatically deducts the money from their salaries before the funds are deposited in a bank or credit union.

Regulators said the program neglected to inform the borrowers of all the fees third-parties would charge to process the automatic deductions. It also failed to explain how often payments were due or that the intricacies of the payment schedule meant additional interest charges, according to regulators.

[Inkfreak]

1. There is massive industry preying on soldiers

I was one of them. These car dealerships thrive on young soldiers arriving at a base/post who need/want car. I remember at Ft. Bragg there were tons of ads placed around reception for us to see. The NCOs did their best to warn us. But, I was still suckered. Young & dumb I guess.

[WooWooWoo]

2. I was actually taken advantage of by this program my first year in

I bought a 2007 Mitusbishi Eclipse for $15,000 back in 2010.

Three years later, when I was about getting ready to get out, after three years of payments of $450 a month, I still had a balance of over $12,000.

That's because this predatory program charged me 23% interest. I wonder if I can get in on this refund, and if so, how?