AG charges loan businesses with consumer protection violations

The Maryland Office of the Attorney General charged several businesses earlier this month with making unlicensed and predatory loans that put consumers at risk of losing their vehicles.

The charges, announced Friday, allege Cash-N-Go Inc. and related businesses offered “title loans” — short-term, high-interest loans secured by consumers’ vehicles — at rates more than 10 times the state’s maximum legal rate of interest, according to a news release. Cash-N-Go and related businesses typically charged annual interest rates of 360%, the release said, adding that, if consumers failed to make payments, their vehicles were repossessed and sold.

Cash-N-Go has locations across Maryland, including Capital Heights, Frederick, Laurel, Rockville, Waldorf and Westminster, according to the release.

“Maryland’s usury laws protect consumers from companies charging outrageous and unlawful amounts of interest,” Attorney General Brian E. Frosh said in a statement. “Title lending requires particular scrutiny, since the loans are often made to vulnerable consumers who risk losing their only means of transportation if they fail to repay their loan.”

Brent M. Jackson, the owner of the businesses, is also charged. Jackson and his companies were allegedly never licensed by the Maryland Commissioner of Financial Regulations to make financial loans in Maryland.

Jackson and the various entities are charged with violations of the Maryland Consumer Protection Act. A hearing on the charges is scheduled for June 25 to 27 at the Office of Administrative Hearings in Hunt Valley.

The defendants are represented by Douglas F. Gansler, a partner at Buckley Sandler LLP in Washington and the former Maryland attorney general, according to the resident agent for Cash-N-Go. Gansler was not immediately available for comment.

The businesses allegedly made more than 1,700 title loans to Maryland consumers between 2007 and 2016 for amounts ranging from several hundred dollars to $6,000. They collected more than $2.2 million from consumers in repayment and tens of thousands of dollars from sales of repossessed vehicles.

Cash-N-Go customers obtained loans believing they were secured by the titles to their motor vehicles, according to the charging document. But consumers allegedly did not understand material terms of the agreement. Customers were required to repay their loans by making in-person cash payments.

Though the transactions were often characterized as “title pawns,” the charges allege they were not true pawn transactions because the defendants did not take possession of the vehicles but only retained the titles, making the transactions secured consumer loans.

Cash-N-Go allegedly led consumers to believe they could repay their loans by making monthly installment payments, but in reality the loans were for 30 days with the option to extend by 30 days if the consumer made an interest-only payment, according to the charges.

“To the extent that Respondents provided consumers with receipts for such payments, the receipts were not itemized as to how the payment was being applied to the loan,” the document states. “As such, consumers were unaware that each payment was only going toward interest, and that none of it was applied to the principal balance of the loan. Many consumers made payments for multiple months or even years on their loans without understanding how they could fully repay their title loans.”

Consumers who failed to make a scheduled payment, or who did not make a payment within a short grace period, lost their cars, most of which were taken to a lot adjacent to Jackson’s office in Martinsburg, West Virginia, where Jackson owns a used car dealership, according to the charges.

“Respondents did not send any written notices to consumers either prior to or after repossession, and they did not provide any written notices to consumers prior to the sales of the motor vehicles,” the charges said.

Consumers with complaints against Cash-N-Go are asked to contact the Office of the Attorney General’s Consumer Protection Division at 410-576-6569.