By now it should come as no surprise that lenders shelling out thousands of dollars to help consumers make purchases for things like houses and cars often use lies and threats in attempts to recoup those funds. And while those tactics might result in some payments, they will also likely draw the ire of federal regulators.

Just ask Ohio-based Security National Automotive Acceptance Company: the latest shady lender facing a lawsuit from the Consumer Financial Protection Bureau over allegations it violated consumer protection laws in order to collect debts.

According to the CFPB complaint [PDF], since July 2011 SNAAC – which specializes in lending money to active-duty and former military to buy used motor vehicles in more than two dozen states – collected millions of dollars from thousands of servicemembers using unfair, deceptive, and abusive practices.

Both active-duty and former servicemembers tell the CFPB that they encountered trouble with the company if they missed or were late on payments.

The CFPB claims that in order to collect on debts, SNAAC routinely exaggerated the potential impacts on servicemembers’ careers if they remained delinquent on their loan obligations, often telling borrowers they could face demotion, loss of promotion, discharge, denial of re-enlistment, loss of security clearance, or reassignment. The suit claims that these repercussions were almost certainly unlikely.

In many attempts to collect debts, the CFPB claims SNAAC would threatened to contact the servicemember’s commanding officers or chains of command.

The suit claims that in some cases, the company did contact servicemembers’ commands by telephone and in writing, disclosing details of the servicemembers’ debts and delinquencies and requesting assistance in bringing the accounts current.

According to the CFPB, the correspondences suggested that the borrower was in violation of military law and other regulations, such as the Uniform Code of Military Justice. The CFPB claims that SNAAC took advantage of the servicemembers’ inability to protect their interests, because many were unaware or did not fully understand the law’s provisions.

SNAAC also allegedly made false and misleading threats to garnish servicemembers’ wages, despite the fact that no such allotments can be made without first obtaining a judgement.

Additionally, the CFPB suit claims the company threatened to take legal action against several borrowers, even though SNAAC never actually intended to do so.

Through the lawsuit, the CFPB is seeking compensation for harmed consumers, a civil penalty, and an order prohibiting the company from committing future violations.

CFPB Takes Action Against Servicemember Auto Lender for Aggressive Debt Collection Tactics [Consumer Financial Protection Bureau]

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