Skip to main content

CFPB Takes Action Against Pawn Companies for Deceiving Consumers About Loan Costs

Bureau Alleges Four Virginia Pawnbrokers Disclosed Misleading Annual Percentage Rates

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today took action against four Virginia pawnbrokers for deceiving consumers about the actual annual costs of their loans. In lawsuits filed in federal court, the CFPB alleged that the four companies broke the law by misstating the charges associated with pawn loans. The CFPB’s lawsuits seek to end the pawnbrokers’ illegal practices, get restitution for the consumers they harmed, and impose penalties.

“When consumers take out a loan, they are entitled to know the actual annual cost,” said CFPB Director Richard Cordray. “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.”

The CFPB’s lawsuits name four companies, all of which are based in Virginia: Spotsylvania Gold & Pawn, Inc.; Fredericksburg Pawn, Inc.; Pawn U.S.A., Inc.; and A to Z Pawn, Inc.

The pawnbrokers named in today’s complaints all 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 that the companies misled their customers about the costs of their loans by disclosing deceptively low annual percentage rates (APRs) that did not reflect all of the fees and charges tacked onto the loans. These inaccurate disclosures in many cases understated the true annual percentage by as much as half of the actual cost.

The CFPB’s complaints allege that the companies’ 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 complaints filed today seek monetary relief, injunctive relief, and penalties. The CFPB’s complaints are not a finding or ruling that the defendants have actually violated the law.

The CFPB recently sued an additional Virginia pawnbroker, B&B Pawnbrokers. More information about that lawsuit 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