CHARLESTON, W.Va. (Legal Newsline) - West Virginia Attorney General Darrell McGraw announced on Tuesday that his office has filed a lawsuit against a Virginia title lender to enforce a subpoena.
McGraw's office filed suit against Fast Auto Loans, Inc., for its alleged refusal to turn over its records after an investigative subpoena. Also named in the suit was the Georgia-based Community Loans of America Inc., which is the owner of Fast Auto Loans, and Robert I. Reich, both companies' CEO and president.
"Title loans" are high-interest loans secured by ownership titles for motor vehicles and are not permitted in the state of West Virginia. If a consumer defaults on these loans, he or she loses possession of their vehicle to the lender no matter how much money is owed or the value of the vehicle.
According to complaints filed with McGraw's office, West Virginians were lured to Virginia seeking title loans with interest rates of 300 percent APR, which greatly exceed the maximum APR allowed in West Virginia law.
"We cannot prevent consumers from traveling to other states to get ill-advised title and payday loans," McGraw said. "But when companies contact West Virginians who allegedly default on the loans, they must obey our state's debt collection laws. If companies break these laws, my office will not hesitate to intervene."
McGraw alleges that several West Virginians have been unlawfully harassed by telephone by Fast Auto Loans through contact to them, their family members, their friends and their employers attempting to shame or pressure them into making payments. Fast Auto allegedly sent agents into West Virginia to seize consumers' motor vehicles if the consumers could not pay.
The suit alleges that, until last year, Fast Auto Loans made payday loans, which are illegal in West Virginia. Fast Auto claims it does not do business in West Virginia and has refused to comply with McGraw's subpoena.