On June 8, 2016, the Michigan Attorney General announced that a Michigan court entered a default judgment and permanent injunction against an automobile title loan company over alleged usurious loans that violated the Michigan Consumer Protection Act. According to the Attorney General, the company charged usurious interest rates on automobile title loans, engaged in illegal collection tactics, and failed to properly disclose large balloon payments at the end of the loan term. The interest rates on some of the title loans allegedly exceeded 150%. The company also allegedly repossessed automobiles in violation of Michigan’s Regulation of Collections Practices Act, which prohibits companies from repossessing automobiles based on defaulted title loans. After the company failed to respond to the complaint, the Court entered default judgment and permanently enjoined the company from conducting title loan business in Michigan without a license, engaging in illegal collection activities, and other violations of Michigan law. The company must also repair adverse credit reports, cancel all Michigan title loans and associated liens, and return repossessed vehicles. The Court assessed a fine of $790,050 and ordered the company to pay $1,418,648 in consumer restitution.
Blog Enforcement Watch June 10, 2016