• Report: #257314

Complaint Review: US Bank, MILES Program, Military Installment Loan And Education Services

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  • Submitted: Wed, June 27, 2007
  • Updated: Thu, June 26, 2008

  • Reported By:manchester Washington
US Bank, MILES Program, Military Installment Loan And Education Services
P.O. Box 55070 Lexington, Kentucky U.S.A.

US Bank, MILES Program, Military Installment Loan And Education Services RIPS MILITARY SERVICE MEMBERS OFF, CONTRACTS RIDDLED WITH HIDDEN FEES, SETS CONTRACTS UP TO BE LATE Ripoff Lexington Kentucky

*Consumer Comment: Other things to check out

*Consumer Comment: Other things to check out

*Consumer Comment: Other things to check out

*Consumer Comment: Other things to check out

*UPDATE Employee: MILES is for First Time Buyers and Bad Credit Only.

*Consumer Comment: WOW, I knew it was bad but I had no idea...

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Tacoma Mountain Mitsubishi South Tacoma Way, US Bank - the Military Installment Loan and Education Services (MILES) Program and Military Assistance Company (MAC), are involved in parasitical practices that feed on our active duty service members. These organizations intentionally market themselves as organizations either directly connected or contracted by the Department of Defense. They use verbal and visional re-enforcement throughout the purchasing, financing and payroll deduction process. These practices are used to lure the service member into believing that these organizations were created to give special consideration to our service members in recognition there commitment to our country while in fact they are taking advantage of our service members and their unique circumstances. They are predatory in nature.

The MILES Program also known as Dealers' Financial Services is owned and operated by US Bank. The program is available to active duty service members only. The program has been developed to intentionally mislead service members into believing they were and are dealing with a government approved program. The MILES Program promises financing for a new or used car, as long as the used car is less then 5 years old, at an interest rate of 17.95% for the life of the loan. The cars sold to these service members are sold at high Blue Book value, with undisclosed fees and excessive undefined charges. The MILES program also works with the Military Assistance Center (MAC) to secure payment to US Bank. MAC is a middleman who takes the car payment out of the service members pay for additionally undisclosed fees. MAC is another program that misleads service members into believing they are dealing with a government program.

On February 27th 2005, Mark (e-2 AT THE TIME) went to Mountain Mitsubishi to look for a car. His intention was to find a car that would cost around $6,000.00. An amount he felt he could afford. Kirk C. Lindt, aka KC Lindt, a salesman for Tacoma Mountain Mitsubishi in 2005, informed Mark that a loan for $6,000.00 was impossible as Mark would need a co-signer on that kind of loan. Since Mark had just recently been relocated from his home state of Texas to Ft. Lewis, Washington a co-signer appeared not to be an option. I say this also because Mr. Lindt did not pursue the co-signer option after making the statement. Surprisingly though Mr. Lindt was able to get Mark a loan for a used car off the Mitsubishi lot for a much higher price. It was a Mitsubishi Lancer with a full sticker price of $12,646.12, with no co-signer.

Mr. Lindt was able to do this with the help of the MILES Program. He knew Mark was going to be approved for the car loan before the paperwork was even sent to the MILES Program as indicated by the US Bank loan contract, the transfer of title through the Washington State Department of Motor Vehicles and the allotment start forms which were all dated Feb.27th, 2005. The day before the dealership verified Marks pay and before he filled out the mandatory MILES vehicle purchase-training questionnaire, two days before he was notified he was approved for the loan, and seventeen days before his credit review was pulled. The loan documents were riddled with hidden fees, over charges double charges, and unexplained charges that were meant to be confusing.

This confusion was overwhelming and was used to prevent Mark from knowing all his liabilities and options. All the time the salesman is reassuring Mark, not to worry all the groups involved have Marks best interest in mind.

The approval of the loan should have been based on 45% of Marks base pay as stated on the MILES Program website and yet unbeknownst to Mark, hidden in all those confusing documents and misleading figures, the car Mark was sold and approved for was approximately 65% of his base pay. Leaving him with a payroll deduction that consumed his paycheck. Eventually leaving him looking for additional money every pay period just to meet his living expenses.

At the time Mark purchased the car he did not have a drivers license or insurance and yet he was approved for a loan. Mark only had a Washington State Drivers Permit, he didnt get his license until March 22, 2005; but that didnt stop Mr. Lindt from selling Mark a car or getting him approved for a loan. According to the MILES Program you have to have your own verifiable insurance in order to be approved for the car loan. Mark did not get verifiable insurance until March 8th, 2005 and that insurance was provided without a valid drivers license.

On March 8th, 2005 Ms. Tambra Grothe, K.C. Lindts girlfriend (at the time), worked for Brooke Agency Services Company, LLC in Lakewood, WA. She still works for Brooke Agency Services Company, LLC in Lakewood. Mr. Lindt arranged for Ms. Grothe and Mark to meet at the dealership. Ms. Grothe then drove Mark to her office in Lakewood to process his insurance paperwork on a 2004 Mitsubishi Lancer with an effective date of March 8, 2005. Mark did not acquire a drivers license until March 22, 2005. In addition to Mark buying insurance from Brooke Agency effective March 8, 2005, US Bank placed insurance on the car effective February 27, 2005, known as Single Interest Insurance and good for the life of the loan, all at Marks expense. Mr. Lindt informed Mark that the paperwork was not complete until April 6, 2005. The car remained on the dealers lot until April 6, 2005, when Mark picked up his car. The dealership, MILES Program and Ms. Tambra Grothe, all feed on Mark to sell their services.

Now we have MAC. MAC according to their website, serves as a liaison between Defense Finance and Accounting Services (DFAS), Military Members, Military Housing Offices and Private companies nationwide by providing custom electronic interfaces and fund movement services. MAC is owned and operated by the Fort Knox National Bank. The vast majority of creditors MAC represents are car dealerships. MAC attaches undisclosed fees to their process adding an additional unforeseen deduction from our service members often-depleted bank accounts.

Mark felt over his head making it easier to just pay instead of fight because he didnt know who or how to fight. Like so many others I suspect! Once the system has begun to tap into the service members pay account (DFAS) the service member losses control of the fees and withdrawals recognizing they are in a perpetual state of debt.

When questioned about these fees MAC states they can charge what ever fees they feel is necessary with no recourse for the service member. MAC charges fees for everything! Sadly, much of MACs corporate officers are veterans and the association to Department of Defense is no mistake. It is meant to mislead the service member into believing they are powerless to change this abusive practice because our government oversees it.

After reviewing Marks payment requirements upon his deployment to Iraq I questioned a late fee charge on his loan account. This is when I learned that US Bank MILES Program had been charging Mark a late fee for 18 consecutive months without notice.

This was supposed to be absolutely avoidable because his payment was automatically deducted through MAC. US Bank, The MILES Program, MAC and the dealership all stonewalled me by either refusing to answer my questions, stated that they lacked any knowledge of the program or passed me on around in an effort to wear me down so that I would give up.

Eventually I found someone who could answer my questions. According to an employee of US Bank, all MILES Program car loans are set up to be intentionally late. The MAC allotment form filled out and signed by the service member states a start date. The actual withdrawals occur after that date and place the service member into a constant delinquent state. It appears the source of this delinquency occurs between the MILES Program and MAC. As well the notification process to service members of their delinquency status fails both from MAC, which states that they charge an undisclosed fee to service member requesting an account statement and the MILES Program US Bank which limits notification to a limited notification process that consists of a statement that is unclear and misleading.

The employee went on to state, The service member is never told that they have to make the first payment and there is a limited number of attempts to contact the service member of their delinquency. The employee explained that the attempts are made through a monthly account summary that is sent to the address on file. The late fee notice is hidden in this summary, in small print and not clearly defined. The employee also stated, The service member is also not informed that they dont have to us MAC to process their loans. They can set up payment through MyPay.

The car dealerships that surround military installations promote US Banks MILES Program, (http://usmiles.com/index.php?s=&url_channel_id=43&url_article_id=184&change_well_id=2)
as the service members best option because of their guaranteed financing, supportive position of active duty military and US Banks national recognition as the sixth largest bank in America. A service member only has to show some interest in purchasing a vehicle from one of these dealerships to find himself/herself whisked away by the ease and convenience of the purchasing process. Dealership salespersons and MILES Program staff associate with the service member through military duty, terminology and knowledge of life in the military to lure the service member into believing the Program is overseen by the Department of Defense therefore they assume they are protected. This assumption allows the dealership and MILES Program to push through increased purchase prices, undeclared fees and unexplained charges incorporated into a loan that exceeds the service members ability to pay. This is coupled with the deliberate establishment of late payroll deductions established through MAC at the request of the MILES Program. We have seen these practices in the Mortgage industry. They're called predatory lending! These processes are an algorithm to tap into the service member's payroll and deduct undisclosed fees and charges. Through the layers of roadblocks e.g. fees to acquire the information, unknowledgeable individuals, run around for information, requests for information never provided, referring back to parasitical partners, giving incorrect answers, being told, that's the way it is giving the service member no resolution but the problem persists. This layering of services makes it impossible for an active duty service member to ever get a complaint addressed; it lacks transparency and is meant to protect the parasitical practices by serving as a barrier.

There is no greater sacrifice an individual can make to his or her country in a time of war than to volunteer for service. We owe them our protection from parasitical practices that would take advantage of the vulnerability these individuals are exposed to through their service. Often our young service people are relocated to states they are unfamiliar with and away from the security of their families. This vulnerability makes them easy targets for these parasitical organizations to step all over their legal rights through the appearance of following legal procedure. In the process our service members are left broke and in debt unable to legally challenge what has been done to them. It is here our government needs to step up to plate and protect those who serve.

Nikki AND MARK
manchester, Washington
U.S.A.

This report was posted on Ripoff Report on 06/27/2007 05:40 PM and is a permanent record located here: http://www.ripoffreport.com/r/US-Bank-MILES-Program-Military-Installment-Loan-And-Education-Services/Lexington-Kentucky-40555/US-Bank-MILES-Program-Military-Installment-Loan-And-Education-Services-RIPS-MILITARY-SER-257314. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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#1 Consumer Comment

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AUTHOR: Mms3rd - (U.S.A.)

My law firm has filed a lawsuit in federal court in Kansas because we allege that a dealership was using the MILES program to get buyers (soldiers) in and then charging them options that were not on the cars...this is called over booking or power booking. You should ask your lender for all materials in your "jacket" to see what options the lender was told were on the car. The more options, the more the lender will lend and the more the buyer pays...at 17-18% interest. In some cases, the cars price was jacked up several thousand dollars because of these phantom options and the soldiers did not know they were being charged for them.
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#2 Consumer Comment

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AUTHOR: Mms3rd - (U.S.A.)

My law firm has filed a lawsuit in federal court in Kansas because we allege that a dealership was using the MILES program to get buyers (soldiers) in and then charging them options that were not on the cars...this is called over booking or power booking. You should ask your lender for all materials in your "jacket" to see what options the lender was told were on the car. The more options, the more the lender will lend and the more the buyer pays...at 17-18% interest. In some cases, the cars price was jacked up several thousand dollars because of these phantom options and the soldiers did not know they were being charged for them.
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#3 Consumer Comment

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AUTHOR: Mms3rd - (U.S.A.)

My law firm has filed a lawsuit in federal court in Kansas because we allege that a dealership was using the MILES program to get buyers (soldiers) in and then charging them options that were not on the cars...this is called over booking or power booking. You should ask your lender for all materials in your "jacket" to see what options the lender was told were on the car. The more options, the more the lender will lend and the more the buyer pays...at 17-18% interest. In some cases, the cars price was jacked up several thousand dollars because of these phantom options and the soldiers did not know they were being charged for them.
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#4 Consumer Comment

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AUTHOR: Mms3rd - (U.S.A.)

My law firm has filed a lawsuit in federal court in Kansas because we allege that a dealership was using the MILES program to get buyers (soldiers) in and then charging them options that were not on the cars...this is called over booking or power booking. You should ask your lender for all materials in your "jacket" to see what options the lender was told were on the car. The more options, the more the lender will lend and the more the buyer pays...at 17-18% interest. In some cases, the cars price was jacked up several thousand dollars because of these phantom options and the soldiers did not know they were being charged for them.
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#5 UPDATE Employee

MILES is for First Time Buyers and Bad Credit Only.

AUTHOR: Washingtonautocredit.com - (U.S.A.)

I have been working with MILES for several years now. MILES is good at what it does: Help service members buy cars with little down payment, and not get completely ripped off at the dealer. The absolute maximum a dealer can sell a car for through the MILES program is Kelly Blue Book Retail on a used car, or MSRP on a New car. In case you have not noticed, a lot of car dealers (especially those located right next to military bases) mark their cars up much higher than the values MILES will let you buy the car for.

It sounds like most of the problems coming from this rant stem from the dealer, Mountain Mitsubishi (who is no longer in business) not disclosing everything they should have.

1. MILES charges a $145 VSI fee directly to the customer for originating the loan. This is in a line of the contract, fully disclosed in black and white. If the dealer does not point it out to you, it is not MILES' problem. Don't want the fee? Do not get the loan.

2. MILES basically has 2 rates at this time. 18.45% for E1-E4 (used to be 17.95%), and 15.45% for E5+. There are situations that the rate can be slightly less with a high down payment, but most the service members I deal with decide to not put that much money down, or with a high down payment, we can get the service member a better loan than MILES. MILES openly tells its dealers, "If the service member qualifies for a better loan, use that one." Meaning they only want to be the backup lender if the service member cannot find a better loan.

3. MAC charges $3.00 per month for the allotment. If you cannot afford the $3.00, don't get the loan. The fee is fully disclosed on the MAC EASE Form that you HAVE to sign for MILES to fund the loan.

4. MILES is one of the ONLY companies willing to give an E1, E2, or E3 an auto loan. Most lenders have stopped lending to anyone that does not have good credit and makes over $2000 per month. Some junior enlisted soldiers qualify for better financing, but in my experience, not many do though.

5. MILES requires a drivers license. Any attempts to kink the system by the dealership are not the responsibility of MILES.

6. MILES also requires full coverage insurance. Any attempts to kink the system by the dealership are not the responsibility of MILES.

7. In all my time dealing with MILES, I have NEVER seen an allotment setup to come out late. In fact, usually they come out early and we have to do damage control because the customer is paying the car payment out of their paycheck before they were ready to. The MyPay system does not allow the user to set a specific start date, so it starts as soon as possible. We have to setup the due date so that there is at least one full calendar month until the first payment is due. The allotment is supposed to come out on the mid-month pay date prior to the payment due date.

I can see where if you got behind on payments, it would be hard to know because you do not generally see a monthly statement like most loans, and the money is automatically deducted. However, if worse comes to worse, all you have to do to edit or stop most allotments (including those we setup for MILES) is log into your MyPay and make the changes needed.

There have been some changes made to the MILES loan process since this report, probably because of incidents like the ones he described with being late. You see, now the allotment has to be actually setup in MyPay by the dealership before the loan will be funded by MILES. Before, the service member would only fill out the MAC Ease form.

I see a lot of service members go places on South Tacoma way, and get ripped off. They buy cars with 29.99% APR, they buy cars with 100,000+ miles. They buy cars that are not going to run for any length of time. MILES is setup to help the service member get a fair deal. Maybe not the best deal ever, but a fair deal. People with good credit say the interest rate is too high, but are seldom willing to co-sign with the person they say is being put into a predatory lending situation. MILES does help service members buy cars with as little as $500 cash or trade equity down, and only will do a limited loan to value on the vehicle. They also are the only lender I know of that will give every customer the option to have GAP and/or an extended warranty on every loan. Most banks will not allow it into the loan or payment limit on every loan. MILES would rather you buy a car and know that if it breaks down, it is covered. And would like you to have GAP in case the car is totaled or stolen and the insurance company does not payoff the balance. With many banks, if the lender has not approved the additional payment, you have to have additional down payment to buy those items. With MILES, your approval amount is BEFORE warranty and/or GAP. In addition, the prices of the Warranty/GAP with MILES are almost always significantly lower than the prices offered to Non-MILES customers. MILES sets the price of both, instead of the dealer setting the price.

At WashingtonAutoCredit.com, we use MILES, SNACC (Service National), and other Military Lenders. It is our job to try to help you find the best loan you qualify for. We are located 10-minutes south of Fort Lewis, and we will help you face to face. The MILES program is the best loan for many service members. However, there are many service members that can do better. Let us try to work for you. If you are in the Army or Air Force at Ft. Lewis or McCord, let us work for you. You can call 360-412-4120 and get the help you need.

http://www.washingtonautocredit.com
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#6 Consumer Comment

WOW, I knew it was bad but I had no idea...

AUTHOR: Denver - (U.S.A.)

Honestly, I am not as vigilant as you are in finding out the facts. I always knew things seemed a little fishy but I just ignored it. Now I am approaching my 5th year on a 5 year contract and still owe $10k. I have just now realized that I was never meant to pay off this loan. All of the money I have put into it has been eaten by finance charges, late fees, and what ever else they think they should be charging me. I have just decided to give the darn thing back to them and tell them to kiss my A S S. I am also filing for bankruptcy so that I ensure those crooked SOBs will never see another dime of my money. Good luck on your lawsuit. If I could build a case against them I would.
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