RICHMOND, Va. (Legal Newsline) - Virginia Attorney General Mark Herring announced a settlement on Tuesday with a Fredericksburg-based pawnbroker to resolve allegations it made illegal automobile title loans.
Liberty Pawnshop & Gold LLC allegedly violated the Virginia Consumer Protection Act, state statutes applicable to consumer finance companies and state statutes applicable to motor vehicle title lenders. Liberty allegedly made no fewer than 54 motor vehicle title loans without a valid license from the State Corporation Commission and charged interest in a way that broke the law.
"When Liberty's actions were brought to our attention, the office of attorney general moved quickly to end these illegal loans," Herring said. "I am pleased we were able to reach a fair and reasonable agreement with Liberty that provides refunds of all interest paid and other relief to the Virginians who received the illegal loans. Liberty's cooperation throughout our investigation should be noted and we will continue to monitor the situation to ensure compliance with terms of the settlement."
Under the terms of an assurance of voluntary compliance, Liberty must offer refunds of any collected interest to borrowers, which could total up to $20,605 in interest paid by 25 borrowers. Liberty will also pay $7,000 in attorney fees and $5,000 in civil penalties.
As part of the agreement, Liberty is permanently banned from making motor vehicle title loans in Virginia without the proper license and from charging and receiving interest in excess of 12 percent annually on consumer loans, unless otherwise permitted by statute.