Liberty Pawnshop & Gold LLC in Fredericksburg, Va., charged with making 54 vehicle title loans between August 2011 and February 2013 without having a valid license, reached a settlement Tuesday with the Virginia attorney general's office.
The settlement bars the business from making loans without obtaining a proper motor vehicle title loan through the state. The business also will not be allowed to charge more than 12 percent interest on any legal loans it makes. Other conditions ban Liberty from collecting on any previous loans and from repossessing a vehicle. All titles must be returned to their original owners and any collected interest must be refunded.
The refunds issued may total $20,605 in interest to be returned to 25 borrowers, according to the AG's office. Liberty also is expected to pay $7,000 to the state for legal fees and $5,000 as a penalty for alleged violations of the consumer protection act.
Liberty was charged with violating Virginia statutes regarding motor vehicle title lenders, consumer finance companies and the Virginia Consumer Protection Act.
"When Libertys actions were brought to our attention, the Office of Attorney General moved quickly to end these illegal loans," Attorney General Mark Herring said in a press release. "I am pleased we were able to reach a fair and reasonable agreement with Liberty that provides refunds of all interest paid and other relief to the Virginians who received the illegal loans. Libertys cooperation throughout our investigation should be noted and we will continue to monitor the situation to ensure compliance with terms of the settlement."
Liberty operates three locations in the Fredericksburg, Va. area. Officials were not immediately available to comment on the settlement.