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An auto title loan company based in Milwaukee misled customers when it sold them memberships for a Tennessee-based auto club, the office of Wisconsin Attorney General J.B. Van Hollen is alleging.

J.B. Van Hollen

Assistant Attorney General Nelle Rohlich recently filed complaints in three cases pending in Milwaukee County Circuit Court – two civil cases brought by residents against the loan company, Wisconsin Auto Title Loans, and a small claims case brought by the company itself against a former customer in Milwaukee.

The state is seeking approval from Judge William Pocan to join in the cases. It alleges the company violated state consumer protection laws by telling customers the auto club memberships were a type of insurance coverage or they were required to take out a loan when, in fact, they were optional.

The club, Continental Car Club of Dayton, Tenn., reimburses customers (with limits) for various auto services, such as $15 towards a flat tire repair. Customers said they didn’t know they were buying a membership or thought it was mandatory.

According to the complaint, the membership fees were typically included in the auto title loans and therefore subject to the same high interest rate, about 300 percent annually.

Wisconsin Auto Title Loans, which has locations throughout the state, is a subsidiary of Georgia-based Community Loans of America.

Last year, former Gov. Jim Doyle added a state ban on auto title loans to a bill regulating payday lenders through a creative application of his veto powers. The ban took effect in January. (The loans in the Wisconsin Auto Title Loans cases were taken out long before the ban took effect.)

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