What was supposed to be a short-term solution to help with bills, a $1,200 online loan, ended up being an extended nightmare for Jennifer Tekut.
“We were completely devastated. I cried uncontrollably,” Tekut recalls. She said her fiance took out the online loan with Liquidations LLC, and secured it with Jennifer’s car, a 2005 Kia SUV.
The company sent them a GPS tracking device that they required Tekut to attach to her car.
When they couldn’t keep up with the payments, suddenly the car was gone.
“They came and took the car in the middle of the night,” Tekut said.
As 5 Investigates first reported, last year Attorney General Maura Healey sued Liquidation LLC, which has gone by a variety of names, including Sovereign Lending Solutions and Auto Loans LLC.
Jennifer Tekut’s repossessed SUV was tracked down at an auction house and given back to her.
Healey accused the company of making loans with hidden, unfair and deceptive terms, and illegally high interest rates — ranging from 181 percent to 619 percent. She said they concealed their scheme from consumers and regulators by operating from virtual office spaces and post office boxes around the country.
She said the loans targeted vulnerable people like Jennifer, who said she had no idea her $1,200 dollar loan included a balloon payment of more than $1,500 at the end.
“I could have bought a brand new car for what I ended up paying back to these people,” Tekut said.
Now, more than a year later, the attorney general is announcing victory over the lender and help for victims.
“The good news is we’ve gone to court and shut them down,” Healey said. “Liquidation is no longer doing business and harming customers here in Massachusetts.”
A Suffolk County judge has voided Liquidation loans in Massachusetts, more than 200 in all, and cleared titles and removed liens it placed on customers’ cars.
Prosecutors also tracked down Tekut’s repossessed SUV at an auction lot in Acton.
But after losing her car, Tekut moved to Malden to be able to get to work with public transportation. Now she doesn’t need a car anymore, so she decided to give back.
“I decided to donate it to Veterans Services, because my son is in the Marines and I thought it would be helpful,” Tekut said.
It’s a a good feeling for someone who lost so much.
“I love that they fought for us,” Tekut said. “I love that little people like us can get some recognition and be heard and somebody is standing up for us. And I think that is great, because you hardly ever see that.”
The judgment ordered Liquidation to pay 1.3 million dollars in restitution and penalties, but getting money back will be a challenge because the company purports to have reorganized in the Cook Islands.
5 Investigates wasn’t able to reach Liquidations LLC for a comment.
Attorney General Maura Healey sued Liquidation over its lending practices.
The attorney general warns all consumers:
· Be wary of any loan that originates solely online. Know your lender and where they are actually located.
· Be skeptical of a promise of fast cash. These offers usually come with very high, illegal interest rates.
· Know and understand what you are agreeing to, in writing, before you finalize any commitment. Make sure you review the loan agreement before you sign it and understand all of its terms. Always request and keep a copy for your records.
· Payday and auto title lending are costly alternatives for short-term cash needs. Before considering a payday loan, consumers should explore other less costly alternatives.
· Contact the Division of Banks to determine if the lender is licensed to do business in Massachusetts.