Archive

Go to:

August 2017
SMTWTFS
12345
6789101112
13141516171819
20212223242526
2728293031
< Jul Sep >
Leaguer Email Subscription

You are not currently subscribed. Click Subscribe below to receive the Leaguer email.

CFPB Fines Titlemax Parent Company $9M for Luring Consumers into More Costly Loans
Wednesday, September 28, 2016 12:15 AM

The Consumer Financial Protection Bureau on Monday took action against TitleMax parent company TMX Finance, LLC, for luring consumers into costly loan renewals by presenting them with misleading information about the deals’ terms and costs. The lender also used unfair debt collection tactics that illegally exposed information about debts to borrowers’ employers, friends, and family. The Bureau ordered TMX Finance to stop its unlawful practices and pay a $9 million penalty.

“TMX Finance lured consumers into more expensive loans with information that hid the true costs of the deal,” said CFPB Director Richard Cordray. "They then followed up with intrusive visits to homes and workplaces that put consumers’ personal information at risk. Today we are making it clear that these actions were unacceptable and illegal.”

TMX Finance, which is based in Savannah, Ga., is one of the country’s largest auto title lenders, with more than 1,300 storefronts in 18 states. TMX Finance offers title and personal loans through a host of state subsidiaries under the names TitleMax, TitleBucks, and InstaLoan. Single-payment auto title loans are usually due in 30 days, with some carrying an annual percentage rate of up to 300 percent. To qualify for the loan, a consumer must bring in a lien-free vehicle and its title as collateral.

The CFPB found that store employees, as part of their sales pitch for the 30-day loans, offered consumers a “monthly option” for making loan payments. They then offered consumers a “Voluntary Payback Guide” that showed how to repay the loan with smaller payments over a longer time period. But the guide and sales pitch did not explain the true cost of the loan if the consumer renewed multiple times. TMX Finance employees also unlawfully exposed sensitive personal information during “field visits” to consumers’ homes, references, and places of employment in attempts to collect debt. The order addresses a period from July 21, 2011, to the present. Specifically, the Bureau found that TMX Finance:

  • Presented consumers with misleading information about loan terms.
  • Exposed information about consumers’ debts to co-workers, neighbors, and family members.

Enforcement Action

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions violating consumer financial laws, including engaging in unfair, deceptive, or abusive acts or practices. Under the order, TMX Finance is required to:

  • Stop abusive loan-repayment policies.
  • Stop intrusive visits to consumers’ homes or workplaces.
  • Pay a $9 million penalty to the CFPB’s Civil Penalty Fund.


View a copy of the CFPB’s order against TMX Finance.