Attorney General Josh Shapiro announces victories in lawsuits against foreign auto title distributors – PA prosecutors
Delaware-based CashPoint and its owner must pay $ 8.5 million and cancel $ 3.2 million in outstanding loans
HARRISBURG – Attorney General Josh Shapiro today announced victories in two separate litigation involving Delaware-based auto title distributors lending to Pennsylvania residents. These victories will help unburden consumers financially and hold companies doing business in Pennsylvania accountable under state law.
State court win against Dominion Management d / b / a CashPoint
The Philadelphia Court of Common Pleas has issued a judgment and order in Dominion Management of Delaware, Inc. and Dominion Management Services, Inc., which acted as CashPoint, and whose owner and Vice President Kevin Williams earned more than 8.5 million US dollars for illegal fees have to pay high interest rates on auto loans.
“These defendants believed that by being a Delaware resident, they could overtake Pennsylvania law and exploit consumers by illegally charging high interest rates,” said Attorney General Josh Shapiro. “With today’s ruling, the court held Kevin Williams accountable and sent a clear message that Pennsylvania’s usury laws apply to Pennsylvania’s car title loans regardless of where the lender is located.”
Of the $ 8.5 million, the court found $ 5.3 million in compensation for consumers, in addition to $ 3.2 million in fines and $ 41,000 in costs. CashPoint and Williams have also been ordered to cancel outstanding loans of $ 3.2 million and release any remaining liens on 800 vehicles. The court also banned the defendants from participating in loans to Pennsylvania residents and prohibited them from selling, assigning, withdrawing, or disclosing any information about the remaining loans.
The attorney general sued CashPoint, Williams, and another now-deceased owner in October 2018. The court found that CashPoint and Williams made more than 3,200 car title loans to Pennsylvania and placed liens on their Pennsylvania-titled vehicles between 2013 and 2018. These loans were all well above the 6% interest rate limit for unlicensed lenders: most had annual interest rates over 200% and some over 360%.
The court found that the defendants had violated the Unfair Commercial Practices and Consumer Protection Act, the Loan Interest and Protection Act, and two provisions of the Corrupt Organizations Act.
The Attorney General has a related lawsuit against Kevin Williams’ brother and co-owner Mark Williams pending in the Philadelphia Court of Common Pleas.
Federal Court Victory on Delaware Auto Equity Loans
Separately, the attorney general won a major court ruling against another auto title distributor, Auto Equity Loans of Delaware, LLC (AEL), which sued the attorney general for blocking a consumer protection investigation.
The BA initiated an investigation against AEL three years ago. As part of the investigation, investigators sent Auto Equity a request for documents and data. In response, Auto Equity sued the OAG, asking a federal court to explain that the United States Constitution prevents the OAG from investigating AEL because AEL claims it does not operate in Pennsylvania.
After extensive litigation conducted by the OAG’s Civil Litigation Section, the US District Court for the Middle District of Pennsylvania upheld the OAG’s motion for judgment on the complaints and dismissed AEL’s lawsuit on the grounds that “the Attorney General is authorized to investigate the plaintiff’s allegation and verify that no part of the company’s loan transactions took place in Pennsylvania. “
The court argued that Auto Equity “does not provide any convincing authority that would prevent the Attorney General from investigating the scope and extent of his conduct” and that “it would be inappropriate for the court to be the Attorney General’s investigative body with civil investigations per se rips and injunctive relief at this stage. “
The federal case was led by Assistant Attorney General Alexander Korn, and the OAG’s investigation into AEL and the lawsuit against CashPoint and Williams are led by Nicholas Smyth, Assistant Director for Consumer Financial Protection.
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