Checks mailed to victims of Stewart Finance

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Published: August 24,2010

Tags: banking and finance, federal government, loans, scam

WASHINGTON — A claims administrator working for the Federal Trade Commission is mailing more than 16,000 checks to consumers who were victims of Stewart Finance Company.

In Sept. 2003, the FTC charged Stewart, seven related companies and their principals with deceiving consumers, many of them elderly, by packing optional products such as accidental death and dismemberment insurance and membership in roadside assistance clubs onto small personal loans. The agency also alleged that Stewart deceptively induced consumers to participate in a free “direct deposit” program that was not in fact free, and encouraged them to incur additional costs and fees by repeatedly refinancing their loans. In addition, the complaint charged that the company failed to provide consumers who were denied loans with federally required “adverse action” notices and placed illegal liens on borrowers’ household goods.

The company settled the FTC charges.

The settlement required the companies to shut down and to agree to the entry of a financial judgment. In addition, certain amounts were owed by individual defendants and directed to a consumer redress fund.

In Sept. 2009, the FTC administrator issued a first round of checks to Stewart Finance victims in the average amount of $54.82. Residual funds are now being sent to 16,291 consumers. The average amount of the checks is $23.40.

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