Schuette demands that the company stop collection activities on illegal title loans they provided to Michigan consumers. The court granted the request for a temporary restraining order and set a hearing date of January 27, 2016 for the preliminary injunction.
The suit alleges that Liquidation, LLC provides unlawful vehicle title loans. They are not authorized to do business in Michigan as a pawnbroker or even a Limited Liability Company and they have burdened more than 440 Michigan consumers with exorbitant triple-digit interest rates ranging from 161.95% to 251.03 percent. Through an online application process, Michigan consumers arranged for the loans for amounts ranging from $1,000 to $5,000, and secured the loans with a vehicle they owned outright.
Liquidation, LLC required possession of the vehicle title and the installation of a GPS tracking device on the borrower’s vehicle before providing the loan. Consumers were generally not provided with a copy of the loan documents, and in the few cases they were, the documents were not provided until after Liquidation, LLC had the borrower’s vehicle title.
“This company’s business model appears designed to take advantage of financially vulnerable consumers with damaged credit histories,” said Schuette. “For many of these consumers, their vehicle is likely their largest asset and only means of transportation, making these illegal loans devastating to their pocket books and even to their ability to go to work.”
This action follows on the heels of Schuette’s December Cease and Desist Order to Liquidation, LLC under the Regulation of Collection Practices Act and a Notice of Intended Action under the Consumer Protection Act. The December Cease and Desist Order was shared with over 1,000 Michigan businesses that might unknowingly assist Liquidation, LLC with repossession of vehicles or other related services.
Liquidation, LLC loans were generally required to be repaid over 6 to 12 months, with a final balloon payment exceeding the amount that the consumer actually borrowed.
Liquidation, LLC associated company aliases include:
- Vehicle Liquidation, LLC
- Autoloans, LLC
- Auto Loans, LLC
- Car Loan, LLC
- Sovereign Lending Solutions, LLC
- Sovereign Lending, LLC
- Management Solutions, LLC
- Loan Servicing Solutions, LLC
Consumers with loans through Liquidation, LLC or one of the alias company names who had their vehicle repossessed on or after December 7, 2015, or who still have their vehicle, should contact the Attorney General’s office to make sure there is a record of the situation. Consumers who have no submitted a written complaint will be asked to file one.