Herring Urges Virginians to Watch For Illegal Fees From PawnbrokersPosted: Updated:
Release from The Office of Virginia Commonwealth's Attorney Mark Herring:
RICHMOND (March 6, 2018)-As part of National Consumer Protection Week, Attorney General Mark R. Herring and his Consumer Protection Section are warning Virginians to be wary of pawnshops that charge illegal interest or fees. In recent years, his office has taken action against a number of Virginia pawnbrokers that have imposed excessive and unauthorized fees on their customers.
"Virginians who utilize pawnshops and pawnbrokers for low-dollar loans should know their rights and carefully review any terms and conditions to ensure they're not being taken advantage of," said Attorney General Herring. "We've noticed that several Virginia pawnshops have tacked unauthorized fees on to their pawn loans. We're going to take action when we find unlawful charges, but we also want to help borrowers understand their rights so they don't end up paying more than they have to."
In recent months, Attorney General Herring's Consumer Protection Section has taken action against the following pawnbrokers, winning restitution and changes in practices to protect consumers:
- Unique Pawn (Sterling)-Filed suit in the Loudoun County Circuit Court on October 26, 2017. This matter is presently in active litigation.
- Pawn USA (Woodbridge)-Assurance of Voluntary Compliance approved by the Prince William County Circuit Court on September 25, 2017, providing for offers of restitution totaling nearly $81,000 and $6,500 in fees.
- Fredericksburg Pawn (Fredericksburg)-Assurance of Voluntary Compliance approved by the Fredericksburg City Circuit Court on September 15, 2017, providing for offers of restitution totaling nearly $46,000 in restitution and $6,500 in fees.
- Pawn Emporium (Harrisonburg)-Assurance of Voluntary Compliance approved by the Rockingham County Circuit Court on October 19, 2017, providing for offers of restitution and fees totaling nearly $3,000.
- Virginia Gold Jewelry and Pawnbrokers (Stafford)-Assurance of Voluntary Compliance approved by the Stafford County Circuit Court on February 2, 2018, providing offers of restitution and fees totaling nearly $1,700.
The OAG Consumer Protection Section previously resolved numerous cases against pawnbrokers including A to Z Pawn in Manassas, Woodbridge Gold and Pawn, 610 Pawn in Stafford, and B&B Pawnbrokers, Pawnking, Spotsylvania Gold and Pawn, and All Star Pawn and Gold in the Fredericksburg area.
Virginians who use pawnbrokers for small loans should be aware that state law only authorizes certain charges and fees in connection with a pawn loan:
1) Maximum monthly interest of:
- 10 percent per month on loans of up to $25;
- 7 percent per month on loans of more than $25, but less than $100; or
- 5 percent per month on loans of $100 or more.
2) A 5 percent monthly storage fee for a borrower's item.
3) A maximum $3 monthly electronic records management fee for making daily electronic reports to law enforcement, and investigating legal title to property being pawned.
Pawnbrokers also are permitted to charge a $5 lost ticket fee in the event a borrower loses a pawn ticket, provided that the charge is disclosed on the pawn ticket.
Consumers who have reason to believe they have been overcharged in connection with a pawn loan are encouraged to file complaints with the Attorney General's Consumer Protection Section:
- By phone: (800) 552-9963
- By email: firstname.lastname@example.org
- Online Complaint Form
- Online Contact Form
Since 2014, Attorney General Herring's Consumer Protection Section has recovered more than $240 million in relief for consumers and payments from violators. The Section has also transferred more than $28.6 million to the Commonwealth's General Fund. Following a major reorganization and enhancement in 2016, the OAG's Consumer Protection Section has been even more effective in fighting for the rights of Virginians.