Settlement Checks to Be Issued to 23,000 Auto Title Loan Customers

January 12, 2014
Milwaukee Journal Sentinel (WI) 
car title lending news

Checks stemming from Wisconsin Auto Title Loans' $2.75 million settlement should start making their way into the mailboxes of about 23,000 customers next month. Borrowers were tricked or forced into paying for memberships that Wisconsin Auto Title Loans sold alongside short-term loans.

Continental Car Club functioned like a type of insurance that would compensate members a small amount for emergency services like towing. Salespeople marketed the membership as optional but sometimes claimed it was a one-time fee or mandatory to obtain a loan. Some consumers claimed they were unaware that they had purchased the membership. The settlement between Wisconsin Auto Title Loans, the Wisconsin Department of Justice, and the Legal Aid Society of Milwaukee -- announced in September and a decade in the making -- does not address the high interest rates on the car title loans, which outraged many consumers. Loans were made against an underestimated value of the borrower's car and typically had to be paid off in a month at interest that sometimes exceeded 300 percent annually. Borrowers still will have to repay the debt.










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