LANSING, Mich. (WOOD) — A former Florida company accused of charging illegally high interest loans on nearly 200 vehicles in Michigan has agreed to repay $1.6 million to its victims.
Michigan Attorney General Dana Nessel’s office announced the restitution amount Monday, which is part of a settlement with now-defunct AutoLoans LLC. Under the plan, customers fall into three tiers:
Tier One: Loan customers who made payments less than the principal amount of their loans or whose vehicles have not been repossessed by AutoLoans. This group will not receive any restitution.
Tier Two: Customers who paid over the principal amount of their loan but did not have their vehicle repossessed by AutoLoans. They will be reimbursed for any verified payments to AutoLoans that was over the principal amount of the loan.
Tier Three: Customers who paid over the principal amount of their loans and had their vehicle repossessed. They will be reimbursed for the fair market value of their vehicle and any verified payments to AutoLoans that was over the principal amount of the loan.
The Michigan Attorney General says victimized borrowers signed over the title of their car to AutoLoans, which then attached a GPS tracker to the vehicle and towed it away if the borrower fell behind. The problem: some of those loans had interest rates ranging from 190% to more than 400%.
The attorney general’s office says more than 190 vehicles in Michigan were part of the predatory lending, at a cost of $258,000 to borrowers.
Two men charged in the alleged scheme — William McKibbin III of Stowe, Vermont and Mark Weiner of Delray Beach, Florida— pleaded no contest to 10 counts of usury, which carries a five-year maximum sentence; 10 counts of false pretenses and the most serious charge of racketeering, which carries a 20-year maximum.
McKibbin’s next court hearing is scheduled for July 23. Weiner’s next court hearing is expected Aug. 8.