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CFPB Takes Action Against B&B Pawnbrokers For Deceiving Consumers About Loan Costs

Bureau Alleges Virginia Pawnbroker Disclosed Misleadingly Low Annual Percentage Rate

Washington, D.C. – The Consumer Financial Protection Bureau (CFPB) today took action against B&B Pawnbrokers, Inc. for deceiving consumers about the actual annual cost of its loans. In a lawsuit filed in federal court, the CFPB alleged that B&B Pawnbrokers broke the law by misstating the charges associated with pawn loans. The CFPB’s lawsuit seeks to end B&B Pawnbrokers' illegal practices, get restitution for the consumers it harmed, and impose penalties.

“When consumers take out a loan, the lender by law must tell them the terms, including the actual annual cost of the loan,” said CFPB Director Richard Cordray. “B&B Pawnbrokers deceived consumers about what that true cost was. We are taking this action to put a stop to it and seek relief for consumers who were wronged.”

B&B Pawnbrokers operates in Fredericksburg, Va., and originates pawn and auto title loans. The CFPB alleges that B&B Pawnbrokers misled its customers about the cost of its loans in more than 2,400 contracts. Specifically, the CFPB alleges that B&B Pawnbrokers unlawfully disclosed a misleadingly low annual percentage rate that did not reflect all of the fees and charges tacked on to the loan, which grossly understated the cost to consumers. For example, when B&B Pawnbrokers made a $200 loan due in a month, it charged the consumer a $10 finance charge, a $10 storage fee, and a $20 processing fee. Each fee is a finance charge that must be included in calculating the annual percentage rate. The sum of these fees, $40, yields an annual percentage rate of 240 percent. B&B Pawnbrokers disclosed an annual percentage rate of only 120 percent.

The CFPB’s complaint alleges that B&B Pawnbrokers' actions violated the Truth in Lending Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the Dodd-Frank Act, the CFPB is authorized to take action against institutions engaged in unfair, deceptive, or abusive acts or practices or that otherwise violate federal consumer financial laws. The complaint against B&B Pawnbrokers seeks monetary relief, injunctive relief, and penalties. The CFPB’s complaint is not a finding or ruling that the defendants have actually violated the law.

The Commonwealth of Virginia has a pending action against B&B Pawnbrokers for violations of the Virginia Consumer Protection Act, and the CFPB coordinated with Virginia in its investigation.

The full text of the complaint is available here:

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit