Lending companies have taken advantage of Michigan's poorest residents for years. They rely on the fact that most people don't know lending laws and don't hire a consumer protection lawyer when they are the victim of collections harassment. But now, Internet companies like Liquidation, LLC, have taken that harassment to a new level. Their auto title loans leave residents with huge debts while depriving them of their most valuable asset – their car.
Last week, The Liblang Law Firm, P.C., warned consumers of the danger of auto title loans. We encouraged consumers facing car repossession to file a complaint with the Michigan Attorney General's office. But what makes these loans so dangerous? Here's the explanation.
No one would agree to a loan with an interest rate of almost 250%. If someone told you you could have $10 dollars today if you paid back $25 dollars next year, you would say “No way!” But through confusing terms, compounded interest, fees, and other illegal tactics, auto title loan companies like Liquidation, LLC, have been getting desperate Michigan residents to do just that.
Liquidation, LLC, isn't even licensed to business in Michigan, but its online loans have cost more than 440 Michigan consumers thousands of dollars, and their vehicles. Consumers can apply online for loans from $1,000 to $5,000. But they are required to provide security for that loan by turning over the title to their vehicles. The company also requires a GPS tracking device to be installed before it will deliver the money. Then they charge as much as 25% interest per month, ending in a huge balloon payment that causes many borrowers to lose their cars.
These lending practices violate the Michigan Consumer Protection Act and the Regulation of Collection Practices Act. Illegally high interest rates are “usurious” and could entitle Michigan consumers to up to $500 per violation. Consumers may also be entitled to reimbursement of interest they should not have been required to pay.
Michigan Attorney General Bill Schuette has sued Liquidation, LLC, in Ingham County Circuit Court, asking that the company's Michigan lending business be shut down, and forcing the company to pay civil penalties and restitution to Michigan Consumers for their loss. Last week, the court heard arguments on whether the shut down should start right away.
In the meantime, consumer protection attorneys like Dani K. Liblang of The Liblang Law Firm, P.C., are encouraging the victims of auto title loans to step forward. By filing complaints with the Attorney General's office and filing their own companion lawsuits, consumers can get back some of their money, stop repossession of their vehicles, and help shut down an illegal lending company. If you or someone you know has lost a vehicle to an auto title loan, contact The Liblang Law Firm, P.C., today for a free consultation.
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