Major national auto repair chains need to stop offering financing through EasyPay Finance and Utah-based TAB Bank, which issue loans at rates up to 189 percent even in states where that rate is illegal, consumer groups recommend.

A coalition of consumer groups sent letters to the corporate offices for AAMCO Precision Tune Auto Care, Big O Tires, Midas, Grease Monkey, JiffyLube, and Meineke urging their stores and franchisees to stop offering the financing.

“Consumers struggling to pay for auto repairs repeatedly report being steered into predatory loans with shocking and often deceptive rates hidden in the fine print of applications, frequently not known until after the repairs are completed,” the letters state. “These predatory loans have a lasting impact on consumers, causing harm to their credit reports and leading to debt collection harassment.”

The letter urged each repair chain “to disassociate itself from these practices that exploit vulnerable families.”

The letters follow a consumer alert and report from the National Consumer Law Center describing hundreds of complaints from consumers about the high rates and deceptive and abusive practices, with many consumers misled and under the impression they were agreeing to interest-free payment plans.

The letters were sent from the following consumer groups: Accountable.US, Americans for Financial Reform, the Center for Responsible Lending, CLEAR, the Consumer Federation of America, and the National Consumer Law Center.

Through auto repair and tire shops across the country, EasyPay Finance, owned by Duvera Billing Services, issues loans up to 189 percent APR. EasyPay advertises to auto repair shops that it can “Increase Your Shop’s Revenue” and prevent “Losing Your Credit Challenged Customers.”

In states that don’t allow predatory interest rates, EasyPay launders its loans through Transportation Alliance Bank or TAB Bank because banks are exempt from state rate caps.

This is a scheme for EasyPay to collect exorbitant rates it can’t legally charge directly, the consumer groups said in a statement. In other states, EasyPay lends directly in its own name, often as a retail installment sale.

Hundreds of consumers have complained about EasyPay auto repair and tire loans. Complaints to the Consumer Financial Protection Bureau, Better Business Bureau, and Ripoff Reports describe:

• Outrageous interest rates of 100 percent to 189 percent, sometimes charged to servicemembers and veterans. Consumers are shocked that payments for months and years have little impact on the balance.
• Interest rates hidden in fine print or not disclosed until repairs are finished. Applications taken over the telephone, or required to be completed on tablets and smartphones, without written copies, leave consumers in the dark about the terms.
• Deceptive promises of full interest rebates if paid in 90 days, with numerous obstacles that prevent consumers from avoiding interest or knowing their payoff balance.
• Electronic debits that weren’t authorized, differed from the agreed payment, or continued after a payment plan was fulfilled.
• Rude and unhelpful customer service and administrative errors, leading to missed payments, fees, and loss of the interest-free option.
• Harm to credit reports, including from loans paid in full or reported for the wrong consumer. No response to consumer disputes.
• Debt collection harassment and refusal to honor payment plans, including for those impacted by covid.

“EasyPay loans are souring consumers on your companies and discourage their repeat business,” the consumer groups said in their letters to the corporations.