When an individual defaults on a loan, the short term lending
company that supplied the cash often loses out. If this continues to happen, the business could be in jeopardy of failing because of a rapid loss of money. Therefore, it is often in the best interest of the owner to consult with a debt recovery agency to ensure they get back the money that is rightfully theirs. However, when lenders take collection matters into their own hands, they must be extremely careful about compliance to rules and regulations. Fast Auto Loans, a title lender based out of Virginia, recently had a suit filed against it by West Virginia Attorney General Darrell McGraw. Lender explores debt collection options
In the lawsuit, InsideARM reported, McGraw claims workers at Fast Auto Loans has coerced those who have missed payments and made unlawful seizures and threats concerning jail time when attempting to collect debts from individuals. The source noted the suit comes after a number of customer complaints. Though the title lender is located in Virginia, many of those who decide to put their car title up as collateral to the company when obtaining fast cash live in neighboring West Virginia. McGraw noted in a release that while his office his no right to ban citizens from attempting to secure loans, he wanted to ensure debt collection
laws were being followed. West Virginia's Attorney General is seeking civil penalties, an injunction on the business and restitution and refunds for customers affected, InsideARM reported. Those who lend may have to follow collection rules
The confusion in Fast Auto Loans tactics may have come from the fact that only some lenders who attempt to resecure money owed to them must abide by collection regulations. The partners at Parker & Wenner explained that when lenders attempt to recover a number of loans themselves, rather than relying on a third-party debt collection agency, they are then considered to be recovery agents, by law. That means they must follow the Fair Debt Collection Practices Act, among other regulations, which limits what can be said during communications with the debtor. According to Section 806 of the FDCPA, those who are acting as recovery agents are forbidden from making threats concerning violence or harm to property and use profane language, among other things. Section 807 deems no one can claim they are going to take legal action when they either have no intent to or cannot because of a lack of standing.