Car Repair Chains May Be Baiting Consumers Into 189-Percent-Interest Loans

A loan service partnered with numerous national chains is trapping people in repair loans with sky-high interest rates.

byJames GilboyJun 14, 2022 5:04 PM
A technician poses at an AAMCO facility
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Multiple national car repair and tire shop chains are luring customers into "payment plans" that are actually law-skirting loans according to the National Consumer Law Center. The NCLC says a "rent-a-bank" is trapping consumers in loans with rates of up to 189 percent, leaving them unable to pay off even small principal loans years after the fact.

EasyPay Finance, in junction with TAB Bank of Ogden, Utah, is subject to hundreds of complaints of "deceptive" loan practices that the NCLC says may violate some state laws. Customers at furniture stores, pet shops, and automotive repair and tire centers around the country are being offered what appear to be 90-day payment plans through EasyPay, with the promise of a full-interest rebate if the loan is paid off. However, these payment plans are actually loans said to hide staggering interest rates of up to 189 percent, sometimes disclosed only in fine print, and sometimes not mentioned at all before the agreement is signed. And for many who sign on the dotted line, hidden interest rates are only the beginning of their financial nightmares.

Repairing a car can be costly for many families already without "predatory lenders," Elyse Hicks, Consumer Policy Counsel at Americans for Financial Reform told ABC 27 in Utah. "Easy Pay and its rent-a-bank partner TAB Bank are preying on people in a way that exploits the centrality of cars in American society."

Big O Tires, one of the chains partnered with EasyPay Finance | Twitter, @bigotires

Complaints collected from the BBB, Consumer Financial Protection Bureau, and Ripoff Reports by the NCLC outline a variety of unsavory practices, from administrative errors to difficult or even unresponsive customer service. EasyPay is accused of making electronic withdrawals for amounts not approved in loan paperwork or continuing to make debits after a loan has been paid off per the agreement. Disputes or attempts to claim the advertised interest rebate are then complicated by rude or unhelpful customer service if met with a response at all, which can lead to long-term problems resolving debts with EasyPay.

Customers also report being harassed by debt collectors as a result of their EasyPay loans, as well as damage caused to their credit scores. Not stemming from the debt itself, but from late reports of payments, or reports being issued for the wrong individual. Veterans and active servicemembers are among those indebted, and at least one complaint wonders if the shop that facilitated the loan (in their case AAMCO) was "in cahoots" with EasyPay. Other chains implicated in the scheme according to the NCLC are Big O Tires, Grease Monkey, JiffyLube, Meineke, Midas, and Precision Tune Auto Care.

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