Military Allotment Processor Must Refund Servicemembers $3.1M For Charging Hidden Fees [View all]
A company aimed at preserving the financial well-being of deployed servicemembers by processing payments to creditors on the consumers’ behalf instead contributed to customers’ financial distress by charging millions of dollars in hidden fees, the Consumer Financial Protection Bureau alleges in a new complaint.
The CFPB announced today that Kentucky-based Fort Knox National Company and its subsidiary must provide $3.1 million in redress to servicemembers for allegedly unfairly and deceptively charging consumers fees for payment services.
According to the CFPB complaint [PDF], Fort Knox National Company and its subsidiary Military Assistance Company (MAC) acted as one of the largest third-party processors of military allotments – which allow servicemembers to deduct payments directly from their earnings to be used to send money home to their families and pay their creditors.
From 2010 to 2014, the CFPB alleges that Fort Knox National and MAC routinely enrolled servicemembers into its military allotment processor without adequately disclosing the fees and then charged the servicemembers without telling them.
http://consumerist.com/2015/04/20/military-allotment-processor-must-refund-servicemembers-3-1m-for-charging-hidden-fees/
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