Meet Scott. When builders in financial trouble stopped paying him the money he was owed as a brick and stone contractor, he became desperate. He needed a loan to buy him time while he tried to collect the money he was owed. Thinking he understood the risks, he used his wife’s 2004 Ford Expedition to get an auto title loan of $2,000 at an interest rate of 25% per month — or 300% APR.

Oden didn’t like the situation. He didn’t even want anyone to see him walking into the place. But he saw it as short-term —- one or two months at most. That would buy him time, he hoped, to collect some of the tens of thousands of dollars he is owed from builders in financial trouble. If all else failed, he knew he could ask his dad for a loan.

“I knew how expensive it was going to be,” he said, “and I weighed all that in my head without thinking of a repo.”

But the ultimate cost of the $2,000 loan exceeded Oden’s worst-case scenario: The Expedition, with a retail book value of about $13,000 was repossessed and sold. He lost every penny of its value.

The AJC says that auto title loans are only legal in 18 states — and in only two Georgia and Alabama — the transaction is treated as a “pawn,” as in you are technically pawning your car. The result? The “auto title lenders” can sell your car for more than you owe them — and keep the difference.

Oden, the contractor who pawned the Expedition, soon learned exactly how Georgia law works.

He made his first payment late and short: paying $200 of the $507 finance charge 11 days after the first due date.

Oden said he called the Lawrenceville business, which operates simply as Title Loans, and promised to catch up. He said he was assured that they wouldn’t take the Expedition, which his wife used for her real estate business.

The next payment was due on a Saturday in November. Oden said he called the store, owned by Optimum Financial Inc., and promised to make the payment the following Monday. He says he was told that would be OK. Instead, Oden says, someone knocked on his door in the wee hours of that Monday morning.

“She said, ‘I’m here to take the Expedition,’ ” Oden said. And she did.

Oden said he went to the title loans office later that day with money in hand to try to get the car back. Instead of taking his money, he said, an employee handed him the personal belongings from the car and told him to come back the next day to talk to the manager.

When he returned, Oden said, he was told the car had already been sent off for auction.

Oden said he couldn’t believe it. “I was shaking,” he said.

He described the car as “immaculate” and loaded: Eddie Bauer trim, a DVD system and seats that were not just heated but cooled.

“It was a real pretty car,” he said.

Title loan’s price high [AJC]
(Photo:meghannmarco)

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