Consumer complaint received 2021-08-19
Company: WHEELS FINANCIAL GROUP, LLC.
State: SD
Product: Payday loan, title loan, or personal loan
Sub-product: Installment loan
Issue: Problem with the payoff process at the end of the loan

Complaint:
XXXX is in violoation of South Dakota codified law : XXXX because they are charging interest above the 36 % cap allowed. They claim to be the servicer of this loan and XXXX XXXX  Utah is the lender and that is why they can charge more than 36 %. The law clearly states that even the servicer of the loan can not collect charges in excess of 36 %. The law is below. 

Engaging in business after procurement of license -- Maximum finance charge -- Violation as misdemeanor -- Loan void.

After procuring such license from the Division of Banking, the licensee may engage in the business of making loans and may contract for and receive interest charges and other fees at rates, amounts, and terms as agreed to by the parties which may be included in the principal balance of the loan and specified in the contract. However, no licensee may contract for or receive finance charges pursuant to a loan in excess of an annual rate of thirty-six percent, including all charges for any ancillary product or service and any other charge or fee incident to the extension of credit. A violation of this section is a Class 1 misdemeanor. Any loan made in violation of this section is void and uncollectible as to any principal, fee, interest, or charge. 


I have already paid XXXX {$3700.00} on {$2700.00} of cash loaned to me in the last 15 months from XX/XX/XXXX through XX/XX/XXXX. 

I've tried to resolve this with XXXX in a fair way. I've told them just to release the lien on my title because they are unknowingly or knowingly breaking SD law by charging over 36 % which make the loan illegal and also make the principal, fees, and interest uncollectable. All I want is for this loan to be completed and to have my title returned to me. 

It is very apparent that XXXX is using XXXX XXXX  Utah as a rent-a-bank. 

I have also learned that XXXX XXXX XXXX  is not only involved in the XXXX Rent-A-Bank scheme, but they rented themselves out to many predatory lenders in order to circumvent state lending laws where there are interest rate caps. 

Being that my only interactions with this loan have been with XXXX and never XXXX XXXX, from their marketing of the title loan, the threats of repossession, and collecting of payments, this is evidence of a rent-a-bank scheme to get around XXXX SD codified law 's 36 % interest rate cap. 

And my payments have all clearly gone to XXXX and not XXXX Bank, this seems like it is a direct violation of XXXX. I can include screen shots of these transactions if needed. 
And, XXXX says that they are the servicer of this loan, which again makes it illegal because they are not a bank. They are a servicer. 

XXXX. Engaging in business after procurement of license -- Maximum finance charge -- Violation as misdemeanor -- XXXX void. 

After procuring such license from the Division of Banking, the licensee may engage in the business of making loans and may contract for and receive interest charges and other fees at rates, amounts, and terms as agreed to by the parties which may be included in the principal balance of the loan and specified in the contract. However, no licensee may contract for or receive finance charges pursuant to a loan in excess of an annual rate of thirty-six percent, including all charges for any ancillary product or service and any other charge or fee incident to the extension of credit. A violation of this section is a Class 1 misdemeanor. Any loan made in violation of this section is void and uncollectible as to any principal, fee, interest, or charge. 



XXXX XXXX  is also clearly breaking the code below by being involved in deception. They have absolutely nothing to do with these loans other than letting XXXX put the name XXXX XXXX  on the loan documents. I have called XXXX XXXX  in Utah and was basically told the same thing. I tried to give them my loan number and asked for help in resolving my loan with them, and they would only say to call XXXX. 

XXXX. Device, subterfuge, or pretense to evade maximum finance charge prohibited -- Penalties. 

No person may engage in any device, subterfuge, or pretense to evade the requirements of XXXX, including, but not limited to, making loans disguised as a personal property sale and leaseback transaction ; disguising loan proceeds as a cash rebate for the pretextual installment sale of goods or services; or making, offering, assisting, or arranging a debtor to obtain a loan with a greater rate of interest, consideration, or charge than is permitted by this chapter through any method including mail, telephone, internet, or any electronic means regardless of whether the person has a physical location in the state. Notwithstanding any other provision of this chapter, a violation of this section is subject to the penalties in XXXX. 

All I wanted from them was to resolve this loan in a fair way, and they just offered threats and a crazy settlement amount.

Company response to consumer: Closed with explanation