New report and consumer alert flag deceptive auto repair financing practices Consumer Federation of America
Washington, D.C.—A report published today by the Stop The Debt Trap coalition reveals auto repair shops across the country are offering predatory loans through EasyPay Finance and Transportation Alliance Bank (TAB Bank) that promise no interest if paid in 90 days but end up carrying annual interest rates as high as 189% – even in states where such a high rate is illegal. The report highlights some of the hundreds of complaints detailing deceptive and abusive lending practices by EasyPay Finance, its parent company Duvera Billing Services and Utah-based bank TAB Bank, which helps EasyPay evade the laws of the ‘State. EasyPay Finance loans are available at auto repair and tire shops across the country, including major chains such as AAMCO, Big O tires, MechanicJiffy Lube, Meineke, Midasand Precision automatic maintenance.
The National Center for Consumer Law has also published a Consumer Alert about these loans, which warns consumers to “beware of the fine print that could hide expensive loans at rates of up to 189%”. Advocates are urging consumers to avoid any loan above 36% APR including fees. If caught in an EasyPay Finance loan, consumers should file a complaint with the CFPB and state regulators, opt out of the forced arbitration clause, and consult with an attorney.
“189% lending is illegal in most states, but TAB Bank is helping EasyPay Finance evade those laws and multiply the pain of an expensive auto repair,” said Lauren Saunders, associate director at the National Consumer Law Center.
TAB Bank is one of the only some rogue banks prepared to defend predatory lenders. The bank, which is licensed in Utah and supervised by the FDIC, helps EasyPay Finance (owned by Duvera Billing Services) charge up to 189% on loans offered through stores nationwideincluding auto mechanics, furniture stores and pet stores offering ready for predatory puppies. In states that have banned predatory interest rates, EasyPay Finance launders its loans through TAB Bank so that it can charge high interest rates that it cannot legally charge as a non-bank lender. In other states, it grants loans directly.
“Auto repair shops across the country, including major auto repair companies, are directing struggling consumers to deceptive, high-cost loans with lasting impacts, including damage to credit records and harassment for debt collection”, said Rachel Gittleman, head of financial services outreach at the Consumer Federation of America.
“AAMCO, JiffyLube, Meineke, Midas and other auto repair companies are bringing their name to shame by helping to create a debt trap for their customers. Auto repair shops and TAB Bank should stop facilitating this loan scheme predator and the FDIC should shut it down,” said Taylor Roberson, federal policy adviser at the Center for Responsible Lending.
In addition to excessive interest rates, TAB Bank/EasyPay Finance loan complaints describe tactics to conceal interest rate, exploitation of veterans and military, use of cashback offers full interest unobtainable over 90 days, unauthorized direct calls, debits, errors and poor customer service, damaged credit reports and debt collection harassment.
“A car repair can be a devastating expense, and financially fragile families don’t need predatory lenders to magnify the damage. EasyPay and its bank leasing partner TAB Bank are attacking people in a way that exploits the centrality of cars in American society. For most people, having a well-driving car is essential to their day-to-day economic life and to running a family,” said Elyse Hicks, consumer policy adviser at Americans for Financial Reform.
Stop the debt trap is a coalition of more than 800 civil rights, consumer, labor, faith-based, veterans, seniors, and community organizations from all 50 states working together to end predatory lending.
contacts: Rachel Gittleman