When taking out a loan or similar cash infusion that has to be repaid over time, it’s important — and required — that lenders provide borrowers with the annual interest rate they’ll be paying before the debt obligation is resolved. Today, federal regulators announced it sued five auto title loans companies for failing to provide that information to consumers in advertisements. 

The Consumer Financial Protection Bureau on Wednesday filed a Notice of Charges that it had filed lawsuits against five title lenders, claiming they violated federal law by improperly marketing their title services to consumers online.

Auto Cash Leasing, Interstate Lending, Oasis Title Loans, Phoenix Title Loans, and Presto Auto Loans, all located in Arizona, offer vehicle title loans to consumers in which the vehicle acts as collateral for the cash infusion. While the loans are generally required to be repaid in a short period of time, the companies are still required to provide an annual percentage rate to borrowers.

According to the CFPB, from at least July 6, the five lenders have been in violation of the Truth in Lending Act by advertising loan interest rates on their websites without advertising a corresponding annual percentage rate.

In one case, a lender marketed a monthly rate but failed to include the legally required annual percentage rate for the loan. An ad for another lender simply asked customers to do the work themselves: to multiply the shown monthly rate by 12.

As part of a Notice of Charge, an Administrative Law Judge from the Bureau’s Office of Administrative Adjudication will review the case, hold hearings, and make recommendations regarding the charges. In the end, the director of the CFPB — Richard Cordray — will issue a final decision.

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