Washington, DC - Following a public comment period, the Federal Trade Commission approved final consent orders with two car title lenders that the FTC alleged failed to disclose important conditions and financing information about their title loans.
Under the consent orders, First American Title Lending and Fast Cash Title Pawn are prohibited from failing to disclose all the qualifying terms associated with obtaining a loan at its advertised rate and what the finance charge will be after an introductory period ends; and from misrepresenting any material terms of its loan agreements. First American is also prohibited from stating the amount of any down payment, number of payments or periods of repayments, or the amount of any payment or finance charge without clearly and conspicuously stating all the terms required by the Truth in Lending Act and Regulation Z.
These cases were the first two car title loan cases for the agency, and are part of the FTC’s ongoing effort to protect consumers in the short-term lending and auto marketplaces. The agency’s guidance Car Title Loans encourages consumers to shop around for their loan, and to look to their bank or other lenders for options that may be more affordable than a car title loan.
The Commission votes approving the final consent orders were 5-0.