A national furniture chain that courted business with military service members outside Joint Base Lewis-McChord is paying $63,000 in penalties to settle state charges that it took advantage of troops with predatory lending practices.
Attorney General Bob Ferguson announced the settlement with New Jersey-based retailer Freedom Stores, Inc. late Thursday. The company has credit-related businesses based in Virginia.
The state fines follow a $2.5 million settlement the company struck in December with the Consumer Financial Protection Bureau to resolve charges that it used illegal debt collection practices after hooking military service members with difficult-to-repay loans.
When other lenders say no, Freedom says YES!
Advertisement cited by state regulators
The company no longer does business in Washington state. It had an outlet in Lakewood Towne Center from September 2011 through August 2015.
The state estimated that 90 percent of its business came from military service members, veterans and military retirees.
It attracted military customers, the state charged, with deceptive advertisements that promised easy credit and “below cost” prices.
"At Freedom, active-duty military, civil service, and government personnel are automatically approved! When other lenders say no, Freedom says YES!” said one advertisement cited by the state.
When borrowers fell behind on payments, Freedom and its associated businesses often reported debts to a military service members’ chain of command. That put troops in danger of facing discipline from their units.
If a bill went unpaid, Freedom would file lawsuits from courts in North Carolina or Virginia, regardless of where its borrowers lived. That led to default judgments against borrowers, according to the state. The Consumer Financial Protection Bureau estimated that the company filed more than 3,500 lawsuits against military service members.
500,000The number of print advertisements mailed to Washington military service members and veterans (and then some)
Freedom did not respond to requests for comment late Thursday. It continues to operate online and has three remaining retail stories in Colorado and Texas military communities.
Freedom was one of several companies whose predatory lending practices were described in a July 2014 report by The Washington Post and the online investigative news site ProPublica.
The state penalties will be sent to the state’s general fund or be used for consumer protection investigations. Freedom’s larger settlement with the Consumer Financial Protection Bureau was intended to be used to repay customers.