MADISON, Wis. (Legal Newsline) -- Wisconsin Attorney General J.B. Van Hollen said Monday his office has reached a preliminary multi-million dollar settlement with an auto title loan company that allegedly engaged in deceptive conduct when selling service contracts.
Van Hollen's office, along with the Wisconsin Department of Financial Institutions and Legal Aid Society of Milwaukee Inc., announced the preliminary settlement with Wisconsin Auto Title Loans Inc.
Wisconsin Auto Title Loans allegedly made membership to its motor club, which was called Continental Car Club, mandatory for consumers who bought an auto title loan and failed to inform consumers that they purchased the product.
Wisconsin Auto Title Loans allegedly rolled the cost of CCC into the total amount of the loan and subjected the cost to the high interest rate attached to the loan.
On Sept. 6, the Milwaukee County Circuit Court entered an order to preliminarily approve a settlement that requires Wisconsin Auto Title Loans to make a cash payment of $2.75 million for restitution, attorney fees and costs.
Additionally, Wisconsin Auto Title Loans agreed to extinguish all finance charges and fees that accrued on about 36,000 accounts, extinguishing millions of dollars in accrued interest and fees.
"This case shows, once again, that companies who violate the law in Wisconsin will be held accountable," the attorney general said in a statement.
"I am particularly pleased with the outcome in this case because people are often suffering from financial difficulties already, and it is troubling to see those individuals being targeted by a deceptive scheme."
A hearing to determine if the court will approve the settlement is scheduled for Dec. 10.