In an effort to protect West Virginians from the abusive and unlawful harassment and triple-digit interest rates of a predatory out-of-state title loan company, West Virginia Attorney General Darrell McGraw today filed suit in the Circuit Court of Jefferson County against Virginia-based Fast Auto Loans, Inc., its parent company, Community Loans of America, headquartered in Atlanta, and its owner Robert I. Reich.
Attorney General McGraw’s lawsuit asks for a permanent injunction preventing Fast Auto 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 suit also charges that Fast Auto Loans violated several state consumer protection laws and asks for civil penalties as well as restitution and refunds for consumers.
“Out-of-state lenders collecting debts in West Virginia will respect the rights of our citizens and the laws of our state or they will face the consequences,” McGraw said during a press conference held at the Attorney General’s Eastern Panhandle Office in Martinsburg. He was joined by consumers who were victims of Fast Auto Loan’s underhanded collection tactics.
“Fast Auto Loans has put hundreds of liens on vehicles owned by consumers from Princeton to Martinsburg, in 24 West Virginia counties,” the Attorney General continued. “Unfortunately, many desperate folks obtained a title loan from the company as a stopgap measure only to find that they had compounded their financial troubles.”
In response to numerous consumer complaints, an investigation by Attorney General McGraw’s Consumer Protection Division found that Fast Auto Loans had charged 300% interest on loans made against car titles, repeatedly harassed and abused West Virginia consumers and their families and friends in attempt to collect debts, made false threats of arrest and criminal prosecution, and confiscated cars without a court order. Some victims’ vehicles were seized even though the amount owed – as little as $100 – was a fraction of the car’s value.
McGraw’s lawsuit was accompanied by sworn statements of several West Virginia citizens who filed complaints reporting extensive victimization by Fast Auto Loans, including:
• Charles Haun of Princeton, found that the $400 he borrowed from Fast Auto Loans in Wytheville, VA, quickly turned into a much higher amount through phantom fees and the company’s failure to disclose its true percentage rate. Even though the company initially insisted such actions were not their policy, FAL repeatedly made rude collection calls to several family members, friends and co-workers if Mr. Haun was even one day late on a payment.
• Virginia Robinson of Martinsburg stated that Fast Auto Loans repeatedly called her, friends, and co-workers leaving messages that the company would take her Jeep if she failed to pay the debt. Fast Auto dispatched KAR Towing of Harrisburg, VA, to take her vehicle when she was not home. KAR left a written notice falsely threatening Robinson that she would be charged with a felony if she failed to relinquish the car.
• Bruce Shanton, Jr., of Ranson complained that Fast Auto Loans repeatedly called him, his mother, and grandmother after he lost his job and was temporarily unable to make payments. When the company arrived to take his car, he initially refused – which was his legal right since FAL did not have a court order. But he gave in after FAL ratcheted up its threats of police action. FAL took Shanton’s car and personal belongings, which were never returned to him.
• Mildred Morris of Martinsburg reported that Fast Auto pestered her work supervisor, friends, and her daughter, who does not live with her, with phone calls. Although Fast Auto Loans seized Morris’ 2002 Pontiac Sunfire, worth many times her $700 loan, the company continued to harass her with demands of additional payments.
• Aaron D. Lee of Martinsburg was unable to continue payments on his loan after experiencing medical problems. Fast Auto began calling him several times per day, and also called his sister and a friend, leaving threatening messages that Lee was behind on his bill. While Lee was in the hospital, FAL took his car and personal belongings, which were never returned to him.
The Attorney General’s lawsuit indicated that the bulk of Fast Auto Loans’ West Virginia victims reside in Berkeley, Hampshire, Jefferson, Mercer, and McDowell counties, which are close to the debt collector’s branch offices across the border in Winchester and Wytheville, VA. Auto title loans are illegal in West Virginia.
“Our office will not tolerate lenders preying upon West Virginia residents who are already facing difficult financial circumstances,” Attorney General McGraw said. “While we cannot stop our citizens from seeking these ill-advised out-of-state loans, we can and will stop predatory lenders from abusing our citizens and violating our state’s debt collection laws.”