McGraw
CHARLESTON -- West Virginia Attorney General Darrell McGraw has filed a lawsuit against Fast Auto Loans Inc., a Virginia title lender, for refusing to turn over its records in defiance of an investigative subpoena.
McGraw's suit also names Georgia-based Community Loans of America Inc., the owner of Fast Auto Loans, and Robert I. Reich, president and CEO of both companies.
So-called "title loans" are high-interest loans that are secured by the ownership titles for motor vehicles and are not permitted in West Virginia.
When consumers default on title loans, they lose possession of their vehicles to the lender regardless of the amount owed or the value of the vehicle.
McGraw's office began investigating Fast Auto Loans after receiving complaints that residents had been lured to Virginia to get title loans with interest rates of up to 300 percent APR -- rates that vastly exceed the maximum allowed by West Virginia law, it said.
"We cannot prevent consumers from traveling to other states to get ill-advised title and payday loans," McGraw said in a statement Tuesday. "But when companies contact West Virginians who allegedly default on the loans, they must obey our state's debt collection laws."
He added, "If companies break these laws, my office will not hesitate to intervene."
Several West Virginia consumers reported that Fast Auto Loans repeatedly contacted them, their friends, family members and employers to pressure or shame them into making payments. If they were unable to pay, the company then sent agents to the state to seize their vehicles.
On March 2, the Attorney General's Office issued an investigative subpoena to determine the scope of Fast Auto Loans' debt collection activities in the state, from its startup in 2003 to present.
McGraw's office said until last year, Fast Auto Loans also made payday loans, which are illegal in West Virginia, with interest rates of 300 percent APR or higher.
For its part, Fast Auto claims it does not do business in West Virginia and has refused to comply with McGraw's subpoena.
