January 28, 2016
Public News Service
LAS VEGAS – A consumer advocate is speaking out against the car title lender TitleMax, saying some of the company's loans violate state law and overcharge borrowers, sometimes by thousands of dollars.
LAS VEGAS – A consumer advocate is speaking out against the car title lender TitleMax, saying some of the company's loans violate state law and overcharge borrowers, sometimes by thousands of dollars.
By state law, title loans can only have 30 day or seven month terms. But the 2015 annual inspection from the Nevada Financial Institutions Division (FID) found TitleMax routinely offers a grace period of an extra seven months with lower payments up front, but much higher interest overall.
Venicia Considine, an attorney with the Legal Aid Center of Southern Nevada, says the extended payments may seem like a good deal, but they lead more people to default and lose their car.
"This 14-month loan that they've come up with, it's 7 months of interest on the entire principal that is reoccurring every month,” she points out. “So it's a significantly higher amount of interest on the loan before you even pay it. You're talking 250 percent interest."
The state also alleges TitleMax, also known as TitleBucks, illegally allows co-borrowers who are not on the title to sign for the loan.
TitleMax's attorney did not respond to multiple requests for comment but said in a court filing that the company’s practices do not violate the law.
Considine says her clients – consumers who have dealt with TitleMax – have been afraid to file suit so her agency has made several complaints to FID, asking it to investigate.
"Trying to litigate against a lender who has your title and the ability to repossess your car is very daunting for somebody living week to week and the only way they can get to work is that vehicle," she stresses.
TitleMax has 42 locations in Nevada. Considine urges borrowers to read what they're signing and stay away from loans that promise one thing but actually say another.
The deadline for all sides to file documents with FID is Feb. 12, at which time an administrative hearing will be scheduled.
