Freedom Stores, Inc.’s illegal debt collection and lawsuits targeted servicemembers

A Virginia-based furniture and electronics retailer with stores near military bases across the country illegally collected debt and filed suit against servicemembers, the Consumer Financial Protection Bureau (CFPB) says in a lawsuit against the company, Freedom Stores, Inc., according to a CFPB press release. The Bureau “alleges that Freedom Stores, Inc., Freedom Acceptance Corporation, and Military Credit Services LLC used illegal tactics to collect debts, including filing illegal lawsuits, debiting consumers’ accounts without authorization, and contacting servicemembers’ commanding officers.” The Attorneys General of North Carolina and Virginia joined in the action against the company, filing a consent order in federal court “to require the three companies and their owners, John Melley and Leonard Melley, Jr. to provide over $2.5 million in consumer redress and to pay a $100,000 civil penalty.” Among the illegal actions noted in the complaint are illegally filing “thousands of lawsuits” in Virginia against consumers who did not live in or sign contracts in Virginia, double-dipping by taking payments from both servicemembers’ paychecks and bank accounts in the same month, and illegally charging payments to bank or credit cards of consumers’ family and friends. For more, read the full release.

Consumer Financial Protection Bureau, Legal Developments