CFPB Sues Auto Lender for Aggressive Debt Collection Tactics
WASHINGTON D.C. — The Consumer Financial Protection Bureau (CFPB) has sued auto finance source Security National Automotive Acceptance Company (SNAAC) for aggressive debt collection tactics against military service members, reports F&I and Showroom.
The CFPB charged the company with using illegal threats and deceptive claims in order to collect debts. It is seeking compensation for harmed consumers, a civil penalty and an order prohibiting the company from committing future violations, claiming the company violated the Dodd-Frank Wall Street Reform and Consumer Protections Act by using aggressive collection tactics that took advantage of service member’s special obligations to remain current on debts.
The Ohio-based auto finance source operates in more than 24 states and specializes in providing vehicle financing to active-duty and former military members.
Once these consumers defaulted, SNAAC threatened to contact a service member’s chain of command and in some cases exaggerated the consequences of not paying. The CFPB alleges that thousands of people were victim to the company’s tactics.
“Security National Automotive Acceptance Company took advantage of military rules to put enormous pressures on service members to pay their debts,” said CFPB Director Richard Cordray. “For all the security they provide us, service members should not have their financial and career security threatened by false information from an auto loan company.”
The CFPB also provided specific details on SNAAC’s tactics, which included telling service members that failing to pay could result in action under the Uniform Code of Military Justice (UCMJ). This action could include demotion, loss of promotion, discharge, denial of re-enlistment, loss of security clearance or reassignment. According to the CFPB, these actions were extremely unlikely.
The auto finance source also contacted commanding officers in an effort to force payment, suggesting that service members were in violation of the UCMJ and other regulations. This tactic took advantage of many consumers who were unaware of the provision and were unclear of how much pressure would be brought to bear because of it.
The company also falsely threatened to garnish wages, which is only possible after a court judgment is obtained. The finance company also threatened to take legal action against customers when, in fact, they had not determined whether they would actually take such an action and in many cases had no such intention at the time.
More Industry

Ownership Priorities are Shifting
A new survey shows that in the U.S. vehicle quality for generation Z is largely defined by advanced safety features, intuitive technology and premium sound systems.
Read More →
Pump Price Jump Calculated
ISeeCars.com examined fuel costs for different power trains, finding which ones have experienced the biggest hits since the war in Iran commenced.
Read More →
Black Book: Weekly Market Update
Wholesale values fell last week despite the spring season still being in the traditional full-gear mode, analysts said.
Read More →
Arkansas Auto Group Acquires First Indiana Rooftop
Performance Brokerage Services represented both the buyer and seller in the sale of Carver Toyota of Columbus by Carlock Automotive Group.
Read More →
Stellantis to Dive Into U.S. Lending
The multinational maker of Chrysler, Dodge, Jeep, Ram and multiple other brands received conditional approvals for a Utah-based industrial bank.
Read More →
New-Vehicle Prices Rise
With April sales down, higher prices on in-demand large vehicles helped inflate the overall ATP, though increases were under long-term averages, Cox Automotive reported.
Read More →
Black Book: Weekly Market Update
Last week in the wholesale automotive market proved to be a mixed bag, analysts reported.
Read More →
Black Book: Weekly Market Update
Conversion rates were flat last week at 63%, Black Book analysts calculated, as low-mileage and almost-near units outpaced the overall market.
Read More →
EU Auto Association Urges Action
Trade relations between the European Union and the U.S. are at risk, causing the European Automobile Manufacturers Association to push lawmakers to make a decision.
Read More →
Driving into the Super CFC Era
Understanding the risks and benefits of retail accounting and Super CFCs can help you better present options to your dealer partners.
Read More →