RICHMOND, VA (WWBT) - A settlement check may be coming your way. CashPoint, a car title lender, will refund nearly $600,000 to more than 800 Virginia customers.
Attorney General Ken Cuccinelli alleges the company operated without a license for two months in 2010. In a letter sent to hundreds of Virginia's CashPoint admits it made errors with loans. The company says it collected interest it probably shouldn't have. The state claims CashPoint operated without a license from October 1st through December 1st in 2010.
Consumer law attorney, Jay Spear with Virginia Poverty Law Center says all loans issued during that time were illegal.
"The State Corporation Commission also fined cash point $35,000 for doing this. They also told them they can't make loans for the next two months," said Speer.
In that letter mailed out, CashPoint says it wants to make things right. A check is also attached but consumer advocate, Dana Wiggins, says read the letter carefully and wait before you cash it.
"Our concerns are that not everybody may have been notified and that for those who may have received a letter as soon as they cash the check they have waived all of their rights," said Wiggins.
The letter from CashPoint, also spells out the terms. But you have options and can seek a private attorney possibly collecting more money.
"One of the folks that called our hotline, we sent to a private lawyer and they got a much better settlement than was gotten under the consent agreement," said Speer.
Speer and his staff at Virginia Poverty Law Center can give you free advice and explain your best options when it comes to CashPoint. He says these settlements are not unusual.
"It is a pattern of a lot these companies, it's not just CashPoint, all of these payday lenders are car title loans have long history of fines and being sued by the Attorney General," said Speer.
Virginia poverty law center advises against getting car title loans. If you have no other choice, make sure you understand what you are signing up for.
"If you can't make a payment, the only remedy for this loan is for the lender to take your vehicle. They can't take you to court, they can't garnish your wages but hey can take your vehicle," said Wiggins.
Another reason consumer advocates advise against car title loans is the interest. In some cases it can be over 200 percent. We did reach out to CashPoint we didn't hear back from them before this story aired. For more information about the settlement with the state you can contact Virginia Poverty Law Center's hotline center. That number is 1-800-830-4551.
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