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MADISON — On Wednesday, May 18, 2011, Wisconsin Attorney General J.B. Van Hollen filed a Motion to Intervene into a Milwaukee County Circuit Court case against an auto title loan company, Community Loans of America (“CLA”), for violations of the Wisconsin Consumer Act.
With the Motion, the State filed a proposed complaint, alleging that CLA (d/b/a Wisconsin Auto Title Loans) engaged in deceptive and unconscionable conduct in the course of making auto title loans.
The auto title loans at issue in this case were short-term, high-interest loans secured by motor vehicle titles. CLA operates out of 22 locations in Wisconsin, marketing and selling title loans that have 300 plus annual percentage rates. It operates in the state as “Wisconsin Auto Title Loans,” but is a Georgia corporation that does business nationwide.
The State complaint specifically alleges CLA engaged in deceptive and unconscionable conduct in the course of selling a purported motor services club, Continental Car Club (“CCC”) with its loans. Under the law, CCC can only be sold as an optional product but consumers report either being unaware it was packed into their loans or being told the product was mandatory or a fee required by the loan.
In most instances the CCC purchase price was rolled into the title loan so consumers ended up paying not only the purchase price for CCC but steep interest on the motor services club membership at the rate of the loan.
The State filed its complaint as an intervening party into an existing case in Milwaukee County, Jones, et al vs. Wisconsin Auto Title Loans and Community Loans of America (09-CV-19545) which involves nearly identical issues of fact and law. The State seeks civil forfeitures and injunctive relief.
“Wisconsin Auto Title Loans targets borrowers who have few, if any, other options to obtain credit. We will not stand by while it subjects these vulnerable individuals to fraudulent and abusive practices,” Van Hollen said. “Enough is enough.”
The case was filed on behalf of the Wisconsin Department of Financial Institutions which administers the Wisconsin Consumer Act. Assistant Attorney General Nelle Rohlich is handling the matter for the Department of Justice.
Consumers who may have complaints against Wisconsin Auto Title Loans may contact Legal Aid Society of Milwaukee, which is handling the Milwaukee County case at 414-727-5300 or the Wisconsin Department of Justice Consumer Hotline at (800) 998-0700.