Cracking down on car title pledge lenders

By MARC PERRUSQUIA
Friday, February 09, 2007

Out of work after an auto accident, Anita Gray needed cash to pay her bills. With nowhere else to turn, she pawned her car to Golden Title Loans, where repayment rates reach 264 percent a year.

Borrowing $1,000, Gray paid Golden Title more than $4,000 over the next 18 months _ more than she'd paid to buy her used, 1997 Saturn in the first place.

And still she owed $1,200. The principal never went down despite paying $220 a month _ and that didn't include a number of late fees and other penalties.

"They're ripping people off," said the 40-year-old hair stylist who sued Memphis-based Golden Title for alleged gouging.

Gray is one of three plaintiffs named in the Shelby County Circuit Court lawsuit that Memphis Area Legal Services hopes will galvanize support to reform practices among Tennessee's car title pledge lenders.

As a second prong in that strategy, the Memphis and Shelby County Anti-Predatory Lending Coalition has drafted a bill in the General Assembly. It would trim fees that title pledge lenders can charge.

"It's an industry that really preys on desperate people," said Legal Services attorney Webb Brewer, who likened title pledges to "evergreen loans" that keep rolling over month after month.

"They've got to come up with $220 every month just to keep from losing their car."

Golden Title owner Doug Golden has said his firm operates legally and ethically, but he wouldn't discuss developments. "I'm just not going to make any comment on that," he said.

Under state law, car title lenders can charge monthly fees of 2 percent interest and a 20 percent administration fee _ 22 percent a month _ when a borrower pledges the title of an automobile as collateral.

The bill being filed by state Sen. Roy Herron and Rep. Larry Turner would limit the 20 percent administration fee to the first month.

After that, lenders could charge only the 2 percent interest a month. Also, after three months, a portion of what the borrower pays would be applied to lower the loan principal.

Herron already has filed a bill this session that would limit the number of months that a title pledge loan can be rolled over. He said he hopes the best aspects of the bills survive and become law.

In addition to the monthly fees, Golden Title has charged customers late fees and other penalties for "calling off" a planned repossession. With the aid of internal business documents, The Commercial Appeal first reported those practices by Golden Title in 2004. A consumer advocacy lawyer told the newspaper then that he considered the late fees and call-off fees to be illegal because they weren't spelled out in loan contracts.

In the suit filed Wednesday, Legal Services lawyers contend that late fees and call-off fees charged to Gray and others are illegal because they exceed the 22 percent-a-month cap. Golden Title also is violating the Tennessee Consumer Protection Act by engaging in unfair and deceptive acts, the suit alleges.

Following the 2004 articles, Legal Services filed a complaint with the state against Golden Title, but there was a problem: The Department of Financial Institutions had no authority to regulate title pledge lenders. That changed with legislation passed in 2005 that allows DFI to conduct periodic examinations of title pledge lenders.

Bogus Lawyer - Real Defaults

New York Attorney General Andrew M. Cuomo announced today that Broome County’s William Slote, who is not an attorney, will return more than $5,000 to southern tier residents who hired him to perform legal work.

Mr. Slote, who did business under the name “Repo Justice,” traveled to local courts in Broome, Chenango, Tioga, and Cortland counties to obtain records identifying the names and addresses of consumers who were being sued for defaulted automobile loans. He then approached these consumers with offers to represent them for fees of up to $225 for investigation and preparation of legal papers. His defenses were rarely, if ever, successful.

“Unqualified and untrained individuals posing as licensed attorneys present a threat to the well-being of those they profess to protect,” said Attorney General Cuomo.

As a result of the settlement, Mr. Slote has agreed to refrain from soliciting clients or drafting legal documents. He will pay $5,400 in restitution to the 38 consumers he charged for his services, and he will pay a civil penalty of $2,000. In addition, Mr. Slote has agreed to pay restitution for any other consumers who file complaints with the Office of the Attorney General that show they paid Mr. Slote for legal services.

Consumers with complaints about William Slote or Repo Justice are encouraged to contact the Attorney General’s Consumer Helpline at (800) 771-7755.

This matter was handled by Assistant Attorney General Michael J. Danaher, Jr. of the Binghamton Regional Office, with the assistance of Senior Investigator Jon Wescott, and under the supervision of Dennis C. McCabe, Assistant Attorney General in Charge of the Binghamton Regional Office.

Source: New York Attorney General's Office

Dodge Rolls Heavy Duty in 2008

Dodge has good news from the big show in Chicago for those wanting to become repo men, or just need fill the convertibles of their enemies with paving stones. The new and tougher than ever before Dodge Ram 4500 and 5500 sport an improved 6.7-liter Cummins turbodiesel that kicks out 610 ft lbs of torque at a mere 1600 RPM. A choice between a six-speed manual or automatic puts all that twist to the wheels and gives this series best in class first gear acceleration. The largest brake rotors in the class help put on the whoa. Best of all you can tow around that puny consumer Dodge Ram on the back of this commercial tougher brother for 350K before major service is required.

Full press release

Repo man gets more than he bargains for...

NEWTON, Mass. -- A repo man in Newton gets more than he bargained for when he tries to take back a man's car.

Police say 64-year-old Lionel Porter repeatedly bumped the repo man as he tried to tow porter's BMW.

The victim - who's from New Hampshire - had asked the police to seal off the street so he could do his job. He was checked out at a hospital but wasn't hurt apparently.

Police say Porter has a suspended license, but still took off in the BMW - he was arrested a bit later.

Watch the VIDEO

Repo men face on-the-job dangers

On any given night, repossession companies pick up about 100 cars from San Antonio streets, alleys and driveways.

For employees of Prime Time Adjusters, every night could be an adventure. Under the cover of nightfall, they move in to get their target and move out — all in a matter of seconds.

"I gotta support my family just like everyone else does," repo man Leroy Rodriguez said.

They have to be prepared for anything to happen.

"He has put the threat of violence out there to us, that he's going to do whatever it takes to keep the vehicle," repo man Mike Waldron said.

Waldron has been repossessing vehicles for 18 years, and there's nothing he won't repossess.

"I've picked up Lamborghinis, limos. I've repossessed even livestock," Waldron said.

The business is dangerous, and there's one thing he will not do: work alone.

"I been shot, stabbed, hit with a bat, and sliced with a box cutter," Waldron said.

The repo business can be dangerous, and that is why they work in teams.

"You're not bullet-proof when you're out here. You always got to watch your back," Rodriguez said.

This is how a vehicle is repossessed:

First, field investigators find out where the vehicle is kept.

Next, tow truck operators make their move late at night in either a conventional tow-truck or a hideaway truck. The hideaway trucks are regular pickups, like a Ford 250 Supercrew, except there is a towing mechanism hidden in the bed of the truck.

"We don't break (and) entering, break into garages to get a vehicle. There's laws and guidelines we have to follow in the state," Waldron said.

The circumstances behind why people fall behind on their payments and lose their cars range from divorce to health issues to unemployment. Taking a car from someone who has fallen ill sometimes makes it hard for the men to do their job.

"When they come out and tell you their life story, you can't get attached," Rodriguez said.

Security Service Federal Credit Union handles about one in four car loans in the San Antonio area. They say less than 1 percent of debtors actually become delinquent, and they do everything they can to work out an alternate payment plan.

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