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Union Workers Credit Services Settles CFPB Lawsuit

Union Workers Credit Services Settles CFPB Lawsuit - The Beacon


By: Jackie

Union Workers Credit Services Settles CFPB Lawsuit

In response to thousands of complaints filed by consumers with the Better Business Bureau and law enforcement agencies, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Union Workers Credit Services in December 2014. Your BBB® has learned that Union Workers Credit Services has agreed to settle the charges.

According to a CFPB December Press Release, the Union Workers Credit Services allegedly “deceived consumers into paying fees to sign up for a sham credit card.” Richard Cordray, CFPB Director, said in the Press Release that hundreds of thousands of people were tricked into spending millions of dollars for a so-called credit card that could only be used to buy the company’s own products. According to the Press Release, the company used direct-mail advertisments suggesting that consumers could receive a pre-approved “platinum card” with a credit limit of up to $10,000 and a 5% annual percentage rate. Consumers paid $37 for the card if they applied via mail and $95 if they applied online. The company collected membership fees from consumers across the U.S. totaling millions of dollars according to the Press Release.

In addition, according to Court documents, CFPB claimed that the company further deceived consumers by implying it was affiliated with labor unions by showing photos of police, firefighters, medical workers, and other public servants and by asking consumers to select their union membership from a drop-down list on the online application form. In fact, Union Workers Credit Services has no affiliation with any union.

The Press Release announcing the settlement stated that Union Workers Credit Services would pay a civil penalty of $70,000. Furthermore, the company will be prohibited from offering any credit products or services and from committing any future violations of federal consumer financial protection laws. In the future, consumers who were harmed by the company’s violations may be eligible for relief from the CFPB’s Civil Penalty Fund. Your BBB will continue to follow this case and let our readers know when such relief is available.

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Posted 3/11/2015. While the BBB endeavors to provide accurate information to the public, changes in the law, facts or circumstances may have occurred since the foregoing was posted. The BBB recommends doing independent research and consulting professional advisors concerning a particular situation.

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Jackie is the Operations and Education Foundation Assistant with the BBB. She assists consumers with business inquiries, and does presentations to senior groups and high school students. She is a regular contributor to the blog.