Bank refunds millions for targeting military customers - KXXV-TV News Channel 25 - Central Texas News and Weather for Waco, Temple, Killeen |

Bank refunds millions for targeting military customers with car loan program

Posted:
HARKER HEIGHTS -

A well known bank and its partner will be shelling out millions in refunds to military customers for deceptive marketing and lending practices.

US Bancorp and Dealers Financial Services have been ordered to pay back $6.5 million to active military members who were part of their car loan program from January 1st, 2010 to June 27, 2013.

The Military Installment Loans and Educational Services auto loan program (MILES), was created to finance sub prime car loans for active military.

The consumer financial protection bureau claims US Bank wasn't up front about the true cost of the loan and the payment schedule. They also misrepresented the cost of vehicle warranties.

DFS required some soldiers to pay using the military allotment system, an automatic debit, which often led to additional third party fees. They also promoted a vehicle service contract that was supposed to cost just a few dollars a month but actually added $43 to each payment.

Now the two companies are returning money to 50,000 service members including 6,000 in the Fort Hood area and 12,000 soldiers across the state.

Assistant Director of Service Member Affairs, Holly Petraeus, says they're committed to making sure service members are treated fairly.

"Something that I don't like to hear is that people are using deceptive practices and breaking the law to target service members to make more money off of them and that's the reason I do this job," said Petraeus.

US Bank said in a statement that despite aspects of the program not meeting the CFPB's standards, they have a strong track record of support for military services.

A portion of the statement reads:

"The CFPB has determined that several aspects of the miles program do not meet their standards... We take seriously the CFPB's concerns regarding these disclosures and certain marketing materials used in conjunction with the miles program. At U.S. Bank, we have high expectations for ourselves and our company's product offerings, and we apologize for any confusion this program may have caused our customers."

The CFPB says they hope this sends a message to any company who tries to take advantage of servicemen and women.

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