U.S. Bank and a partner, Dealers’ Financial Services, have agreed to repay $6.5 million to more than 50,000 service members who financed auto loans, the Consumer Financial Protection Bureau says.
The refunds, about $100 per person, will be given to military personnel who had outstanding MILES loans between Jan. 1, 2010, and June 27, 2013. MILES is a loan program specific to the military. It’s short for Military Installment Loan and Educational Services.
MILES loans require automatic deductions from a service member’s paychecks through an outdated allotment system, which the CFPB explains in greater detail here. The bank failed to disclose allotment fees and withdrew payments at times it did not properly disclose, the CFPB says. “The companies also misrepresented the true cost and coverage of add-on products financed along with the auto loans,” the agency said in a blog post.
The affected service members will receive reimbursements for the fees without any action on their part.
From now on, service members won’t need to use allotments to participate in the program. Instead, they’ll be able to use online bill payment methods available to most consumers, the agency says.
This article was originally published on MoneyTalksNews.com as 'Feds Order Bank to Refund Fees to Military Members'.