Consumer Finance Insights
May 31, 2017

Massachusetts AG Obtains Judgment Against Online Auto Title Lender for Illegal Loans

On May 25, 2017, Massachusetts Attorney General Maura Healey (“Massachusetts AG”) announced​ a final judgment and permanent injunction entered​ in Suffolk Superior Court against an unlicensed ​online auto title lender, permanently banning the company from operating in Massachusetts and voiding over 200 loans made by the company to Massachusetts borrowers. The judgment also prohibits the title lender from repossessing any of the vehicles connected to the loans, and orders the company to pay $1.135 million in civil penalties and nearly $200,000 in restitution.

The court found that the company made and collected on loans with undisclosed, unfair, and deceptive terms, including illegally high interest rates and abusive interest-only payment schedules. Some of the loans had interest rates ranging from 181 percent to 619 percent, in violation of Massachusetts usury laws.  The online lender was contacted by prospective customers either online or by phone.  According to the Massachusetts AG, the lender was not licensed to issue small loans in the Commonwealth of Massachusetts.