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Auto Equity Lender Under Investigation For Consumer Protection Violations

A lender in Florida finds himself under the prying eyes of the Attorney General’s office after he was found to have violated several consumer protection laws. The tinder that sparked the investigation came when a Tampa Bay Times story discovered a trend where many consumers complained that they were charged interest rates that far exceeded that of rate ceilings prescribed by the state of Florida.

They were also manipulated into agreeing to debt cancellation packages that were valued at $25,000. The lender claimed that these debt cancellation packages would be able to eliminate the remaining debt that a debtor owed for a vehicle.

It was also claimed that the debt elimination will take effect upon the death of a borrower or in the event that a borrower becomes unemployed, disabled in any way, or when the borrower is found to be under severe duress. This was according to a source from the Consumer Financial Protection Bureau.

The lender in question is Marlin Financial and at least a dozen lawsuits have been filed against the lender. Most of these lawsuits cited the debt cancellation package as the center point of the complaint.

As a rule of thumb, it is particularly dangerous to dabble in things that you do not have a comprehensive understanding of. This principle is especially true when what you intend to get into involves a significant amount of money.

Luckily, thanks to the internet, which is arguably the greatest invention to have ever existed, there are many resources that can be of use to anyone who has access to it. A prime example of a good resource to read before you even think about applying for an auto equity loan is this article: Car Equity Loan – How it works.

 

Many consumers opt to apply for an auto equity loan because this type of loan is based on the difference between the value of the vehicle and what the consumer has yet to pay off.

This is a much more favored borrowing option versus the typical car title loan. While it’s true that a title loan can give consumers a bigger amount of money, it is also required that the vehicle be paid off in full.

The Marlin Financial case details a complaint, as well as a lawsuit filed by Isaiah Brugman, who applied for an auto equity loan for $10,000 for a Jaguar that he had purchased.

After being manipulated into accepting a $25,000 debt cancellation package, his total debt swelled to $35,000. He eventually defaulted on his debt, which resulted in the repossession of his Jaguar, along with the possessions he had in his car.

According to other complaints filed by several consumers, the online application process manipulated online applicants into accepting a debt cancellation package. As per requirement of the state, applicants were to be given the discretion to accept or decline the debt cancellation package.

The manipulation happened when the application seemed to be rigged to automatically shut down whenever an applicant declined to use the debt cancellation package.

 

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