Chain stores direct poor customers to predatory auto repair loans
Owning a car means enduring different levels of headaches, but there’s one nightmare that haunts us all: costly and unexpected repairs. And where there are big, stressful, urgent bills, there are shady entities waiting to take money from desperate people. consumer reports alerts customers to a new trend Overcharged: Major auto repair chains like Jiffy Lube, AAMCO, Meineke, Midas, and Precision Tune Auto Care offer payment plans through shady loan companies charging predatory interest rates, targeting the poor with poor credit to their most desperate.
It works like this: while most states have caps on interest rates to prevent predatory lending, some still allow banks to charge whatever they want. EasyPay Finance, a loan company mentioned in the CR report, uses Transportation Alliance Bank, which operates out of Utah where there is no interest rate cap. Customers who cannot afford the cost of a repair, who do not have other forms of credit, are offered the option of financing the store invoice via EasyPay, with the understanding that, if the invoice is paid within the 90 days they won’t be charged interest. After those three months, the ridiculous interest rates – up to 189% – and hidden fees start piling up.
There are hundreds of unverified complaints on websites like the Better Business Bureau and the Consumer Financial Protection Bureau. Even when the customer pays the balance within the 90 day period (or tries to do so), EasyPay does not always keep its end of the bargain. Since CR:
[C]Consumer complaints against EasyPay Finance and its parent company Duvera Billing Services, LLC, based in Vista, Calif., allege that the company makes it nearly impossible for consumers to repay loans on time and that the company charges consumers a fee or unexpected interests. A complaint on the Consumer Financial Protection Bureau database describes how payment problems due to an alleged clerical error invalidated the 90-day interest-free agreement, regardless of the consumer’s good faith efforts to clarify the issue. “He told me he already had my correct debit card number because I gave it to him to pay the application fee,” the 2018 complaint states. “I also have two receipts showing he had the correct debit card number as he used it to charge a [$500.00] deposit and run the [$90.00] Registration fees. I didn’t know anything about the input error and tried to fix it. I spoke to three different people at . . . and they refuse to honor the 90 as cash. A response from the company on this complaint states: “The company believes it has acted appropriately as permitted by the Contractors Act.
consumer reports contacted several major auto repair chains to find out more about EasyPay. Responding companies said CR most of their stores are franchised, with individual store owners deciding what financing options to offer their customers. EasyPay did not respond to CR‘s requests for comments.
We all love cars here, but I’m starting to feel the amount of bullshit involved in owning a car, especially since owning a car is a requirement for so many Americans. One in three people in the United States don’t have a few hundred dollars on hand for an unexpected car repair (or any other surprise expense). And it’s not like people can just go out and buy a new used car – the prices increased by 40% compared to a year ago, with an average used car now costs $27,500. It’s hard to blame the poor for being caught up in predatory schemes like these when there are so few other options.
For more information on these predatory auto repair loans and how to avoid them, check out full consumer reports article here.