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TMX Finance LLC

On September 26, 2016, the Bureau took action against TitleMax parent company TMX Finance LLC, a specialty finance company that originates and services automobile-title loans through its affiliates operating out of approximately 1300 brick-and-mortar storefronts located in 18 states. Single-payment auto title loans are usually due in 30 days, with some carrying an annual percentage rate of up to 300 percent. The Bureau found that store employees, as part of their sales pitch for the 30-day loans, offered consumers a “monthly option” for making loan payments and then offered consumers a “Voluntary Payback Guide” that showed how to repay the loan with smaller payments over a longer period. The guide and sales pitch did not explain the true cost of the loan if the consumer renewed it multiple times. The Bureau found that TMX Finance engaged in abusive conduct by materially interfering with consumers’ ability to make an informed judgment about whether to pay off the loan over a longer period: it materially interfered with consumers’ ability to understand that they are receiving a 30-day transaction, that the guide is not an actual repayment plan, and that renewing the transaction over an extended period of time would increase the overall costs of the transaction. TMX Finance also engaged in unfair debt collection practices by revealing information about consumers’ past-due debts while visiting their homes, references, or places of employment. The Bureau ordered TMX Finance to stop its unlawful practices and pay a $9 million penalty.

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CFPB Fines Titlemax Parent Company $9 Million for Luring Consumers Into More Costly Loans

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