WASHINGTON (Legal Newsline) — The Consumer Financial Protection Bureau (CFPB) announced lawsuits Dec. 19 against four Virginia pawnbrokers that allegedly deceived consumers about the cost of loans.
According to the CFPB, all four companies misstate the charges associated with pawn loans. Each defendant makes consumers pay a finance charge on loans, and these charges include several fees such as “appraisal,” “interest,” “storage” or “setup” fees.
The CFPB alleges the companies deceived consumers by stating their loans came with low annual percentage rates without disclosing that the number did not reflect all fees tacked onto the loan.
“When consumers take out a loan, they are entitled to know the actual annual cost,” CFPB Director Richard Cordray said. “We are taking action today against pawnbrokers that deceived consumers about these costs, and we will work to make sure they stop violating the law and provide relief for consumers who were wronged.”
In the lawsuits, Spotsylvania Gold & Pawn Inc., Fredericksburg Pawn Inc., Pawn U.S.A. Inc. and A to Z Pawn Inc. are named as defendants.
The CFPB seeks restitution for consumers, injunctive relief to put an end to illegal practices, and the imposing of penalties.