NY State Attorney General Settles The Score For Soldiers Targeted By Predatory Loans
New York State Attorney General Eric Schneiderman announced a $540,000 settlement with a company accused of financially abusing military members in New York. Freedom Stores, a now-defunct Virginia-based retailer and financing firm, reportedly targeted military members in a fraud scheme. The company deceptively sold soldiers consumer goods at highly inflated prices. The soldiers were then locked into revolving credit agreements with undisclosed fees and extremely high interest rates.
“Freedom Stores took advantage of service members using deceptive practices, roping them into high interest contracts and ruining their credit — and sometimes their military careers,” said Schneiderman.
Schneiderman was able to grant zero balances to over 250 soldiers that were targeted by the company. Some soldiers reportedly owed up to $8,600. The average soldier owed about $2,100. Any judgments against the soldiers by the company will be eliminated and negative trade lines will be removed with credit reporting bureaus.
Freedom Stores aggressively pursued any service members that were unable to make their payments, often with no accounting for how or if the payments were being applied to the debt. The undisclosed fees and interest rates were typically deducted directly from their military paychecks or personal bank accounts and deposited to unlicensed lenders.
The company ceased operations in 2015, but continued to collect on contracts entered into before that date. Jean Noonan, lawyer for Freedom Stores, defended the company’s policies and practices.
“We believe our operations were in full compliance with the law, but we care a lot about our customers and we’re happy to take this action on behalf of them and to resolve the matter in a friendly way with the New York attorney general,” she said.