Florida Title Loans Business Faces Scrutiny
Inside Subprime: Nov 1, 2018
By Grace Austin
An investigation from the Tampa Bay Times in September revealed Marlin Financial’s unsavory dealings — including pushing consumers into unnecessary products, levying interest rates above statewide caps, and not allowing customers to recover items in their cars that were repossessed by the company. The latter accusation is against Florida law.
Since then, a local congressman, U.S. Rep. Charlie Crist, D-St. Petersburg, sent a statement to the newspaper that it was contacting the Consumer Financial Protection Bureau and its acting director Mick Mulvaney to look into the Florida-based company after the Tampa Bay Times investigation.
Now, the CFPB says its looking into Miami-based Marlin Financial over “deceptive practices.” In a letter dated from mid-October to Crist, the consumer watchdog agency said it was evaluating those claims and takes such allegations “very seriously.” The letter shied short of saying if the CFPB had found anything to back up those claims and would be taking action.
Meanwhile, the Florida title loan firm is also facing a separate Florida Attorney General investigation into those deceptive and potentially illegal practices going back to 2017. According to the Tampa Bay Times, that office received 19 complaints in the past four years, and the Better Business Bureau has received dozens.
And several consumers filed lawsuits against the company in 2017 over a misleading debt cancellation product in their contracts that increased those consumers’ loan balance exorbitantly. They say they were overcharged thousands of dollars. More consumers have come forward with similar stories of being taken advantage of by the company and saddled with debt.
Although the Florida title loan firm is still currently an active company in the Sunshine State, its closing could have repercussions for those who currently do have title loans with the embattled title lender. A note on its website says it’s no longer accepting new loan applications as of September 26.
Florida does have restrictions on title loans. Those fall under the Florida Title Loan Act, which caps loan rates at 30 percent under $2,000, 24 percent on the next $1,000 and 18 percent for over $3,000. The duration of title loans is 30 days after the date of the title loan agreement, and the Florida Title Loan Act requires title loan lenders to be licensed by the Florida Office of Financial Regulation.
But Florida title lenders have found loopholes that can lead to mounting fees and even vehicles being repossessed.
That means the allegations levied against the Florida title loan firm could have serious repercussions for the company. But any potential victims are encouraged to file complaints with the CFPB, Florida Attorney General, or Florida Office of Financial Regulation, while it remains to be seen how federal and state investigations will play out.