Monday, July 2, 2012

WV AG Tags Car Title Loan Outfit In Suit Alleging Harassment Of Debtors, Their Families & Friends, False Threats Of Arrest, Criminal Prosecution, Etc.

In Martinsburg, West Virginia, The West Virginia Record reports:

  • West Virginia Attorney General Darrell McGraw said [] his office has filed a lawsuit against a "predatory" out-of-state title loan company in Jefferson County Circuit Court.

  • In a news release, McGraw said he filed the suit in an effort to protect residents from the "abusive and unlawful harassment and triple-digit interest rates" of Virginia-based Fast Auto Loans Inc., Georgia-based Community Loans of America Inc. and Robert I. Reich, the president and CEO of both corporations.

  • Their business consists of loaning money to people who own motor vehicles. The loan is secured by a lien on the borrower's vehicle. These types of loans are often referred to as "title loans" -- which are not authorized by state law, according to the Attorney General's Office.

  • In his lawsuit, McGraw is asking for a permanent injunction preventing FAL from making unlawful threats of criminal prosecution and halting the company's collection of excess charges, failure to follow the law in seizing consumers' vehicles, extreme methods of coercion and other deceptive, unfair and illegal debt collection practices.

  • The attorney general's suit charges that FAL violated several state consumer protection laws and asks for civil penalties as well as restitution and refunds for consumers.
  • In McGraw's newest action against the company, he alleges FAL charged 300 percent interest on loans made against car titles, "repeatedly harassed and abused" state consumers, their families and friends to try to collect debts, made false threats of arrests and criminal prosecution, and went as far as confiscating cars without court orders.

  • In fact, some victims' vehicles were seized even though the amount owed -- as little as $100 -- was a fraction of the car's value, the attorney general said.

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