The Federal Trade Commission (FTC) has taken action against Aqua Finance, Inc. (AFI), resulting in a settlement that will provide significant financial relief to consumers affected by deceptive sales tactics. The settlement includes $20 million in refunds and $23.6 million in debt forgiveness for consumers harmed by AFI's misleading financing practices.
According to Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, AFI and its dealers employed deceptive tactics, including the use of misleading teaser rates, to entice consumers into signing up for loans, resulting in additional costs for consumers. The FTC's complaint highlighted that these practices left consumers with unexpected debts and significant interest payments, impacting their ability to manage their finances effectively.
The complaint also revealed that AFI's dealers misled consumers about the financing terms for water filtering and softening products, leading to financial difficulties and harm to their credit scores. Dealers were found to have misrepresented financing terms, failed to disclose crucial information about the loans, and in some cases, sold non-functioning systems to consumers.
Furthermore, the complaint noted that AFI was aware of the deceptive practices carried out by its dealers but failed to take appropriate action to address the issues. Despite receiving numerous complaints from consumers since 2018, the company did not adequately intervene to prevent consumer harm.
As part of the proposed settlement, AFI has agreed to implement measures aimed at protecting consumers and rectifying the harm caused by its dealers. These measures include closely monitoring dealers, providing clear disclosures about financing terms, offering refunds totaling $20 million, forgiving $23.6 million in loans for certain consumers, and ensuring accurate representation of financial products to consumers.
The FTC's investigation and subsequent actions were conducted in collaboration with various entities, including the Tennessee Office of Attorney General, the California Department of Financial Protection and Innovation, and the Texas RioGrande Legal Aid. The FTC emphasizes its commitment to promoting fair competition, protecting consumers, and combating deceptive business practices.
The Commission's efforts in this case were led by FTC staff attorneys from the Southwest Region, including Edward Hynes, Luis Gallegos, Reid Tepfer, Erica Hilliard, and Tammy Chung. The Commission's decisive action serves as a reminder that deceptive practices targeting consumers will not be tolerated, and companies engaging in such behavior will be held accountable for their actions.
