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.
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.