Release date:
5/8/2017
(RALEIGH) Attorney General Josh Stein announced today that the Department of Justice has resolved a lawsuit against predatory auto title lenders in North Carolina. Liquidation, LLC made illegal loans to more than 700 North Carolinians under many names and charged interest rates of 161 percent to 571 percent, which far exceed legal limits in North Carolina. Loan amounts ranged from $800 to $7,000.
“Law-breaking lenders can wreak havoc on a person’s credit and cause financially-strapped people to get even further behind,” said AG Stein. “My office will not allow predatory lenders to take advantage of consumers in this state. Companies that attempt to charge loan shark interest rates will be shut down.”
The defendants solicited the loans online, after which they asked people to send the defendants their vehicle title to secure the loan. If people failed to make a payment, the defendants repossessed the borrower’s vehicle. The defendants were not licensed to make loans in North Carolina and often failed to disclose all of the loan terms until after the borrowers agreed to the loans.
The NC Department of Justice obtained a temporary restraining order and preliminary injunction order against Liquidation, LLC, also known as Auto Loans, LLC, Car Loan, LLC, and Sovereign Lending Solutions, LLC in 2016. After the defendants failed to appear in court, the NCDOJ traced their bank accounts to secure restitution funds and successfully froze $178,000.The Court’s final judgment provides that:
· Loans made by the defendants are void and cancelled;
· Defendants are permanently prohibited from engaging in loan business in North Carolina;
· The $178,000 in frozen funds will be transferred to NCDOJ for consumer restitution and consumer protection purposes;
· Defendants liens are cancelled;
· Consumers who still have their vehicles can receive a new title without the lien;
· And a civil penalty of $3.5 million will be entered against the default defendants.
Two former employees also entered a consent judgment in which they agreed to permanent injunctions and substantial money judgments unless they collectively pay $15,000 to NCDOJ for consumer restitution.
Contact:
Laura Brewer (919) 716-6484
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