Tuesday, March 25, 2008

Attorney General McDonnell Announces Settlement with Auto Title Lender Auto Cash Title Loans Agrees to Make Refunds to Eligible Consumers

For Release: March 25, 2008 / Contact: J. Tucker Martin or David Clementson /Website: www.vaag.com / Phone: 804-786-2071 / Email: Tucker.Martin@oag.state.va.us or dclementson@oag.state.va.us

Attorney General McDonnell Announces Settlement with Auto Title Lender Auto Cash Title Loans Agrees to Make Refunds to Eligible Consumers


RICHMOND – Attorney General Bob McDonnell has reached a settlement for violations of Virginia ’s Consumer Finance Act with Auto Cash Title Loans, LLC, an automobile title lender operating in Richmond and Spotsylvania .

“I am pleased we were able to reach a fair and reasonable agreement with Auto Cash to provide refunds and other relief to affected Virginians,” McDonnell said.

Auto Cash generally makes loans to consumers which are secured by a motor vehicle title. Since June 2007, Attorney General Bob McDonnell has successfully negotiated settlements with six automobile title lenders. These settlements have provided the following total relief to consumers:

  • $458,668 in refunds to 2,637 borrowers;
  • $1,926,969.88 in forborne deficiency collection from 2,944 defaulting borrowers who had their vehicles repossessed; and
  • $5,089,354.09 in forborne interest collection from 9,624 borrowers.

The civil settlement with Auto Cash Title Loans LLC is in the form of a Consent Judgment that has been filed with the Richmond Circuit Court for approval.

According to the Complaint, Auto Cash’s violations occurred between January 2006 and June 2007. During this time, Auto Cash charged its borrowers interest rates that exceeded statutory limits in the Consumer Finance Act. Unless exempt, that Act prohibits unlicensed lenders from charging and receiving annual interest exceeding 12 percent on consumer loans.

The settlement includes the following key terms relating to future loans and title loans made by Auto Cash during the period in question:

  • A permanent injunction preventing Auto Cash from violating the Consumer Finance Act in the future by charging and receiving interest in excess of 12 percent on consumer loans, unless Auto Cash is otherwise exempt by statute;
  • Auto Cash agrees to make refunds totaling $25,137.44 to 115 borrowers for finance charges paid on loans paid in full during the first 60 days after the loan was made;
  • Auto Cash agrees not to collect deficiency amounts totaling $33,550.31 owed by 76 borrowers who obtained loans, later defaulted on those loans, and whose vehicles were repossessed;
  • Auto Cash agrees not to collect $89,075.00 in interest owed by 40 borrowers who obtained loans, later defaulted on those loans, and whose vehicles were not repossessed;
  • Auto Cash agrees not to collect $200,629.36 in interest owed by 132 borrowers who obtained loans and are current on monthly payments;
  • Auto Cash agrees not to repossess vehicles belonging to borrowers who obtained loans during the relevant period; and
  • Auto Cash agrees to pay $15,000 for reimbursement of the Commonwealth’s attorney’s fees.

The Attorney General’s Office will be monitoring the compliance phase to ensure that the settlement is properly administered.

Consumers who have questions about the settlement may contact Auto Cash directly: (804) 745-9007 in the Richmond area, and (540) 507-4080 for the Spotsylvania store. Under the settlement, Auto Cash must accept settlement-related collect calls from consumers residing outside of the local calling area.

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