Ohio Title Loan Firm Refuses Full Loan Payment from Veterans Group
Inside Subprime: Nov 5, 2018
By Nikolas Wright
An Ohio title loans provider has refused a lump payment for a loan it issued to an Army veteran recovering in a hospital from multiple strokes. And now the interest and fees on the loan could skyrocket the balance, making matters worse
It’s a troubling story: The family of Gibson ‘Gib’ McMaster III says the title loan firm, an Akron, Ohio auto title lender, refused a lump sum payment from the Summit County Veterans Service Commission, which offered to pay off the loan for McMaster. But the title loan firm refused it, claiming the commission wasn’t a “real place,” according to a story by WEWS, the local ABC affiliate.
McMaster took out a title loan on his vehicle from the title loan firm in 2017 after finding himself in a financial bind. He took out a $515 title loan to pay for repairs to his family van. With additional fees, it came to $1,122.25. Then, McMaster ended up in the hospital.
That’s when he and his family sought assistance from Summit County Veterans Service Commission. Despite having the money to pay off the loan, the title loan firm wouldn’t take it, and now the loan’s balance could end up close to $2,500.
McMaster’s situation is a cautionary tale. The best way to prevent a similar plight is to avoid title loans altogether. Seek out financial help from friends, family, church, or a more manageable loan provider, such as a lender that issues lower-cost installment loans. Veterans should contact the Veterans Service Commission for assistance prior to taking out a loan.
While new changes to Ohio law protect borrowers from predatory lenders, title loan providers get around these limits by operating as credit services organizations, charging interest rates that top 300 percent. It’s unclear why this particular title loan provider hasn’t accepted the payment on behalf of McMaster, but the more a lender can run out the clock, the higher a payment they can claim.