WASHINGTON, D.C. — The Consumer Financial Protection Bureau has ordered Security National Automotive Acceptance Company (SNACC) to pay $3.28 million in refunds and fines to resolve charges that it violated consumer protection laws to collect debts from servicemembers and other consumers.

The finance company, which specializes in financing vehicle purchases by servicemembers, was ordered to refund or credit about $2.8 million to alleged victims and pay a $1 million penalty. A separate court order bans the firm from using aggressive tactics, such as exaggeration and deception. It is also prohibited from threatening to contact commanding officers to coerce servicemembers to make their payments.

“Servicemembers should not be forced to pay because a debt collector used deceptive tactics,” said CFPB Director Richard Cordray.

The Ohio-based auto finance company, which operates in more than two dozen states, was originally sued this past June by the CFPB, which charged the finance source with violating the Dodd-Frank Wall Street Reform and Consumer Protections Act for using illegal threats and deceptive claims in order to collect debts.

The CFPB said the finance source exaggerated the potential impacts of a delinquency on servicemembers careers, including telling customers that failure to pay could result in action under the Uniform Code of Military Justice. The company also allegedly contacted and threatened to contact commanding officers to pressure servicemembers to pay — the CFPB finding that the firm included a provision in its contracts that said it could contact commanding officers about servicemembers’ debts.

The CFPB also alleged that SNACC threatened to garnish servicemembers’ wages and misled servicemembers about possible legal action.

To view the consent order, click here.