Michigan curbs illegal auto title lending
Financially troubled Michigan drivers who have turned to bad title loans for cash may find some relief after action by the state’s attorney general’s office.
Michigan Attorney General Bill Schuette has fought to stop illegal auto title loan recoveries offered to Michigan consumers by Liquidation, which does business as AutoLoans, Sovereign Lending Solutions, Car Loan and other names.
The state has declared that these companies are not licensed to do business in Michigan as a pawnbroker or even as a limited liability company.
More than 440 Michigan consumers have found themselves with triple-digit interest rates ranging from 161.95% to 251.03% after taking out such loans online. Loans ranged from $1,000 to $5,000.
Auto title loans were secured by a vehicle that the consumer owned. Liquidation loans required possession of the vehicle title and the installation of a GPS tracking device on the borrower’s vehicle before issuing the loan.
Often, consumers have not even received a copy of loan documents or notice of price gouging.
When borrowers missed payments, Liquidation made harassing phone calls. In some cases, the company repossessed the borrower’s car or truck and sold those vehicles at auction houses. The lender then kept all proceeds from those car sales.
On Wednesday, Schuette said he got a default judgment and final order of permanent injunction of Judge William Collette of the Ingham County Circuit Court Against Liquidation and several associated companies.
The lawsuit prohibits further collection activity on these illegal securities loans that were made to Michigan consumers.
Michigan consumers who have been victimized by illegal title lending may be eligible for a new replacement title through the Michigan Secretary of State to Remove Liquidation or other related company name as a lien holder .
But the consumer must be a current owner of the vehicle with a Michigan title naming one of the companies involved. And the consumer had to be a resident of Michigan at the time the loan was issued.
Affected consumers can contact the Michigan Secretary of State at 888-767-6424 and ask to speak to the Office of Investigative Services Complaint Line. Or call the office directly at 517-335-1410 from 8 a.m. to 5 p.m. weekdays. You will need your vehicle identification number and license plate number.
Defendants are prohibited from accepting any interest on a title loan or any other loan payment made by a Michigan consumer. No collection calls or emails. No vehicle repossession, no threat of repossession.
Michigan regulators noted that the liquidation is an offshore business organized in the Cook Islands. Thus, the state said, it is uncertain whether a $2.2 million reward will ever be collected.
Consumers are warned that auto title loans come with a lot of risk and are not permitted under Michigan lending laws. See www.Michigan.gov/ag.
Contact Susan Tompor: 313-222-8876 or [email protected] Follow her on Twitter @Tompor.