CFPB Takes Action Against Multiple Pawnbrokers

December 19, 2016

On Monday, December 19, 2016, the CFPB took action against four Virginia pawnbrokers for allegedly deceiving consumers about the actual annual costs of their loans.   The pawnbrokers are Spotsylvania Gold & Pawn, Inc.; Fredericksburg Pawn, Inc.; Pawn U.S.A., Inc.; and A to Z Pawn, Inc.   In lawsuits filed in federal court, the agency alleged the four companies broke the law by misstating the charges associated with pawn loans.  The Bureau’s lawsuits seek to end the pawnbrokers’ practices, get restitution for the consumers they harmed, and impose penalties.

 

The companies named in the complaints charge consumers a finance charge on their loans. The charge is made up of several fees, called, for instance, “appraisal,” “interest,” “storage” or “setup” charges. The CFPB alleges the companies misled customers about the costs of their loans by disclosing deceptively low annual percentage rates and not reflecting all of the fees and charges tacked onto the loans.