Virginia Reaches Legal Settlement with CashPoint

Virginia Attorney General Ken Cuccinelli

RICHMOND – On Thursday January 12, 2012, Attorney General Ken Cuccinelli announced that a settlement has been reached with Dominion Management Services, Inc., doing business as CashPoint, resulting in nearly $600,000 in refunds to eligible customers. This action is a result of the company’s alleged violations of Virginia laws applicable to consumer finance companies, motor vehicle title loan lenders, and the Virginia Consumer Protection Act. CashPoint had previously attempted to repossess vehicles from these customers.

CashPoint is a lender that makes loans to consumers which are secured by motor vehicle titles.   It operates out of 14 locations across Virginia, including locations in Alexandria, Charlottesville, Fredericksburg, Front Royal, Leesburg, Manassas, Richmond, Stafford, Vienna,  Warrenton, Winchester, and Woodbridge.

“I am pleased we were able to reach a fair and reasonable agreement with CashPoint that provides refunds and other relief to hundreds of affected Virginians,” Cuccinelli said.  “The company self-reported that it made loans before receiving its license after legal claims were brought to its attention. They also cooperated with us throughout our investigation.”

The alleged violations occurred from October 1, 2010 through December 1, 2010.   Prior to October 1, 2010, CashPoint operated its motor vehicle title lending business in accordance with laws that expired on September 30, 2010.   Although CashPoint filed an application for a motor vehicle title loan license on September 27, 2010, it did not receive a license from the State Corporation Commission until December 2, 2010.

During the period from October 1, 2010 through December 1, 2010, CashPoint operated without a license and made closed-end loans to 913 consumers secured by the motor vehicle titles of those consumers.    The interest rates it charged its borrowers during this period greatly exceeded Virginia’s legal limits and did not come within any exemptions of the Virginia statutes applicable to consumer finance companies or the statutes applicable to motor vehicle title loan lenders.   Unless licensed or otherwise exempt, those statutes prohibit lenders from charging and receiving interest in excess of 12 percent per year on consumer loans.   In comparison, copies of loan contracts from CashPoint’s unlicensed period, which are attached to the complaint filed by the commonwealth along with the settlement, disclosed annual percentage interest rates of 190.62% and 243.02%.

The settlement includes the following key terms relating to the loans CashPoint made during its unlicensed period and future loans:

CashPoint agrees to make refunds totaling more than $592,000 to in excess of 850 borrowers representing the amounts those borrowers paid in addition to the principal amount of their loans;

CashPoint agrees not to collect interest or any other fees or amount above the initial principal loan amount borrowed from any borrower who received a loan during its unlicensed period;

CashPoint agrees to return vehicle titles, along with appropriate lien releases, to any borrower who received a loan during its unlicensed period, and later made payments equaling or exceeding the initial principal amount of their loan;

CashPoint agrees not to repossess vehicles belonging to borrowers who obtained loans during the relevant period;

CashPoint agrees to pay the attorney general $25,000 for reimbursement of the commonwealth’s reasonable expenses, costs and attorney’s fees, and $10,000 as a civil penalty for CashPoint’s alleged willful violations of the Virginia Consumer Protection Act; and

A permanent injunction preventing CashPoint from violating the Virginia statutes applicable to consumer finance companies, the statutes applicable to motor vehicle title loan lenders, and the Virginia Consumer Protection Act (i.e., charging and receiving interest in excess of 12 percent on consumer loans), unless the business is licensed and/or otherwise exempt by law.

Senior Assistant Attorney General David Irvin and Assistant Attorney General Mark Kubiak represented the commonwealth in this matter.

The civil settlement is in the form of a consent judgment that has been filed with the City of Richmond Circuit Court for approval.

Individual consumers who received loans from CashPoint during its unlicensed period and who  have questions about the settlement may contact CashPoint