On March 18, 2016, the Massachusetts Attorney General announced that it obtained a preliminary injunction against an online auto lender over claims the company originated loans with illegal interest rates and fees in violation of Massachusetts usury laws. According to the Attorney General, the company offered online title loans to Massachusetts consumers with interest rates that exceeded those permitted under Massachusetts criminal and civil usury laws. Over 200 Massachusetts consumers allegedly procured loans from the company, at interest rates ranging from 180% to 620%. In addition, the company allegedly failed to disclose interest rates and fees associated with the loans, engaged in abusive debt collection tactics, and repossessed and sold vehicles at prices above the outstanding lien on the vehicle. The Attorney General also alleged the loans included payment schedules with interest-only payments and final balloon payments that frequently far exceeded the total amount of the original loan. According to the Attorney General, the company also failed to obtain the appropriate licenses to originate auto loans in Massachusetts. The preliminary injunction order requires the company to stop collecting payments on certain loans, cease repossession activities, and prohibits the company from originating new loans in Massachusetts. The Attorney General is seeking a final order providing restitution to affected consumers, voiding all outstanding loans, and prohibiting the company from originating abusive loans in Massachusetts.
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