On May 31, 2023, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with an Indiana-based non-bank installment lender. ​​The consent order alleges that the lender engaged in unfair, deceptive, and abusive acts or practices concerning the “marketing, sales, and financing of optional ancillary products” that it offered.

​Specifically, the CFPB alleged that the lender violated §§ 1031 and 1036(a)(1)(B) of the Consumer Financial Protection Act (CFPA) by attaching optional add-on products to loans without advising consumers that the products were optional and advertising that its optional add-on products have a cost-free “Full Refund Period, during which the Customer could consider whether to keep or cancel” the product.  The CFPB alleged that the lender did not provide full refunds for cancelled products, however, because the lender did not refund “the interest attributable” to cancelled products that were attached to consumer’s loans. The CFPB also alleged that the disclosures provided to consumers regarding these products were inadequate and materially interfered with consumers’ ability to understand the terms and optional nature of the add-on products. Under the terms of the consent order, the lender agreed to place $10 Million in an account to redress consumers the interest attributable to any optional add-on produts that were cancelled, and pay an additional $10 Million in civil monetary penalties. The lender also agreed to alter its marketing and sales practices.

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