Blog Enforcement Watch June 29, 2022

Massachusetts AG Resolves Allegations that Motor Vehicle Title Lender Issued Illegal Loans

On June 29, 2022, the Massachusetts Attorney General’s Office announced ​that it had resolved allegations that a motor vehicle title lender made illegal loans to customers and repossessed cars to collect payments, with a settlement agreement that requires the lender to pay over $900,000 in redress to consumers.​

The Attorney General alleged that the motor vehicle title lender charged consumers exorbitant interest rates on small dollar automobile loans and engaged in unlawful debt collection and automobile repossession practices in violation of Massachusetts consumer protection laws.  The Attorney General alleged that the lender often issued loans in amounts less than $5,000 and charged interest rates of up to 300 percent, violating the 12 percent rate cap imposed by the Massachusetts’ Small Dollar Loan Statute.

The settlement agreement requires the motor vehicle title lender to pay $500,000 in restitution and forgive over $400,000 in outstanding loan balances and post-repossession deficiency obligations.  Additionally, the agreement provides that the lender will be barred from engaging in any consumer lending, servicing, or debt collection activities in Massachusetts.

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