[Former TitleMax store managers told ProPublica and The Current
about how they were trained to keep customers unaware of the true
costs of their title pawns. When they were more transparent, they
faced repercussions. ]
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SALES PRACTICES OF THE NATION’S BIGGEST TITLE LENDER  
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Margaret Coker, The Current
January 19, 2023
Pro Publica
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_ Former TitleMax store managers told ProPublica and The Current
about how they were trained to keep customers unaware of the true
costs of their title pawns. When they were more transparent, they
faced repercussions. _

Former TitleMax employees Ted Welsh Lupica and Cordelius Brown found
that many of the Savannah, Georgia-based company’s policies were
unethical. , Credit: Malcolm Jackson for ProPublica

 

This article was produced for ProPublica’s Local Reporting Network
in partnership with The Current [[link removed]]. Sign up
for Dispatches [[link removed]] to
get stories like this one as soon as they are published.

ProPublica and The Current previously covered title lending in Georgia
in the article “How Title Lenders Trap Poor Americans in Debt With
Triple-Digit Interest Rates
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In her mid-20s, Cordelius Brown thought she had found the perfect job.
She was thriving as a store manager at TitleMax, a Savannah,
Georgia-based company that dominates a segment of the state’s
subprime lending industry known as title lending
[[link removed]].

Brown’s easy rapport and hustle made her a natural in convincing
Georgians with few credit options to sign up for TitleMax’s lending
product. She was earning more than she ever had, thanks to bonuses she
received based on a percentage of her store’s profits made from the
company’s targeted consumers — people like her own family who were
struggling to make ends meet in low-wage service industry jobs, living
on a fixed income or out of work because of poor health.

For people written off as credit risks by traditional lending
institutions, a “title pawn” from TitleMax can help finance urgent
needs. The transaction is straightforward: The company lends money in
exchange for collateral — the title to the vehicle in which the
customer drove to the store.

But Brown’s customers continued to struggle, despite the financing
from TitleMax. A key reason, she came to believe, was that the actual
costs of borrowing were being masked by the sales techniques used by
the company, which is exempt from Georgia’s usury laws and can lend
money at terms that would be illegal for other subprime lenders.

“I carry a lot of guilt,” the 35-year-old said. “My community
trusted me. What the company was selling to the community wasn’t
good for them.”

Brown believes TitleMax distorts the true cost of borrowing to its
tens of thousands of customers annually in Georgia. Credit: Malcolm
Jackson for ProPublica

In 2016, the Consumer Financial Protection Bureau fined TMX Finance,
the parent company of TitleMax, $9 million after the federal regulator
determined that it violated federal laws with unfair, deceptive and
abusive acts toward customers in Georgia, Alabama and Tennessee.

The CFPB also placed TMX Finance under a consent order
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to ensure the company’s compliance with the laws.

But Brown and two other former managers at TitleMax stores across
south Georgia told The Current and ProPublica that, despite ongoing
scrutiny by the federal regulator, the company continued similar sales
techniques that distorted and hid the true costs of borrowing in
Georgia until as recently as 2021.

Brown and another former store manager agreed to go on the record with
their experience at five separate stores in Savannah and Columbus,
Georgia. The third, who also worked in Savannah, requested anonymity
out of fear of legal entanglements for speaking out against the
company, which last year posted $735 million in revenue and is known
in its key market of Georgia for its litigious nature.

The Current and ProPublica also reviewed internal TitleMax company
documents, emails and text messages that corroborated the former store
managers’ allegations.

TitleMax’s top executives have been clear publicly
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that the company’s business model depends on repeated monthly
interest payments by its 293,000 customers nationwide. Brown, who
worked as a store manager at TitleMax for almost seven years, and
former Savannah store manager Ted Welsh Lupica both said that the
company’s business model was drilled into them in training, and that
they faced repercussions for telling customers how to pay off their
debt quickly or in full.

Welsh Lupica, a military veteran, said his supervisors told him to
stop being transparent with customers about the true costs of
borrowing.

Still, Welsh Lupica kept providing this information to his customers.
“I would be explicit. I would tell them, ‘Look, you make $2,000 a
month and you want a $2,000 loan.’ I’d tell them, ‘Even if you
pay us $200 a month, you are going to be doing that for the rest of
your life because that’s not going to pay down the loan’” with
the triple-digit interest rate, said Welsh Lupica, who worked with
Brown for a few months at a store on Savannah’s east side.

The CFPB, which in December extended its consent order with TMX
Finance
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through late January, declined to comment on the former store
managers’ allegations.

Welsh Lupica quit TitleMax in September 2020 after he said he received
a second oral reprimand for his transparent sales pitch and has
pursued a different line of work.

Brown was fired in June 2021 for violating store policies, a move that
came shortly after she had filed a complaint with the Equal Employment
Opportunity Commission alleging racial discrimination by the company.

TMX Finance did not respond to requests for comment.

TitleMax, the nation’s largest title lender, boasts that it offers a
rewarding workplace with plenty of upsides for employees who work
hard. The company has a “passion for customer service coupled with a
desire to create opportunity,” according to its website
[[link removed]]. “Fast-paced,
dynamic, energetic — and just plain fun!”

In 2015, fresh from earning an associate degree in business, Brown
liked what the company was promising. She had always been described as
a natural salesperson. And she was familiar with TitleMax’s
products: Her sister and some of her family’s acquaintances had
taken title pawns.

When she was first hired in Columbus, Brown avidly consumed the
company’s slickly produced training folder, paying close attention
to TitleMax’s explanations of how employees could boost their
monthly pay and get promoted. Employees would boost store profits —
and receive a financial bonus — based on closing new accounts, the
average size of title pawns and persuading customers to keep monthly
interest payments coming in. Each of TitleMax’s more than 200 stores
in Georgia tracks its own financials — which means, for store
managers, “the more you sell, the more you make,” Brown said.

As an assistant store manager at the time, Brown was not aware that
the system that sounded so good to her was running afoul of federal
consumer protection laws.

The year after Brown was hired, in September 2016, the CFPB found that
TitleMax’s businesses in three states had been violating multiple
federal laws intended to protect Americans from predatory lenders or
deceitful financial practices. In a 21-page consent order, the federal
regulator described how the true costs of borrowing were hidden by
TitleMax’s sales pitches and the company’s proprietary document
known as a “voluntary payback guide,” which was given to customers
to instruct them on ways to minimize their monthly payments without
informing them that it could lengthen the time to pay off their debt.
Those practices, the CFPB investigators concluded, “materially
interfere with a consumer’s ability to understand that the longer
the consumer takes to pay off the transaction, the more expensive the
transaction will be, or to understand how much more expensive the
transaction will be if paid off over a longer time.”

The result was that customers would owe their original debt to the
company, even after making payments for many months or years —
something that boosted profits for the company but was “unfair,
deceptive or abusive” to customers, according to the CFPB.

TMX Finance did not admit to any wrongdoing but agreed to pay a $9
million fine.

Shortly afterward, in a lawsuit filed in the Magistrate Court of
Dekalb County, Georgia, a retired Navy veteran made similar
allegations that the voluntary payback guide he had signed at an
Atlanta-area store was deceptive. (TitleMax successfully had the case
transferred to federal court in Georgia.)

In court filings, TitleMax pushed back against the allegations. Its
lawyers argued that the voluntary payback guide could not be construed
as deceptive because it was not a legally binding document, and that
the company followed federal Truth in Lending Act disclosures in its
title pawn contracts. The judge cited these two arguments when he
dismissed the lawsuit in the company’s favor in 2018.

Still, after TitleMax announced the CFPB’s order internally to its
employees, Brown recalled that the voluntary payback guide disappeared
from her TitleMax store. Sales techniques, however, didn’t change,
she said.

By 2017, Brown had been promoted to store manager and had worked at
two Columbus stores. She was being praised by superiors for increasing
performance at the outlets, which served a primarily Black clientele.
In 2019, she was promoted again and sent to a third store. Within
months, her district supervisor and the regional vice president were
applauding her work to store managers around the region, according to
the emails reviewed by The Current and ProPublica.

Brown said her success came down to building trust with potential
customers and her long hours hustling after payments from delinquent
customers.

Brown and other store managers in Georgia were still boosting customer
interest in the company’s title pawn contracts by emphasizing the
monthly interest rate that TitleMax would charge, generally between
9.9% and 12.9%, according to a review of corporate documents and an
analysis of contracts by The Current and ProPublica. In Georgia,
however, because the contracts are structured to last only 30 days and
customers are allowed to roll over the contract an unlimited amount of
times, the true costs of borrowing remained opaque.

From July 2019 through June 2022, roughly 210 TMX Finance stores in
Georgia under the brand names TitleMax and TitleBucks issued new title
pawns for approximately 47,000 vehicles annually. They represented
more than 60% of the state’s total volume
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of title pawns. In November, a review of more than two dozen Georgia
title pawn contracts conducted by The Current and ProPublica found
that annual interest rates in typical TitleMax contracts ranged from
119% to 179%.

Brown said she focused on collecting those repeat monthly payments in
line with her corporate training and relished the role. She couldn’t
recall ever talking to her hundreds of customers about an amortization
schedule that would reduce their principal and finally get their
account balance to zero. Her training made it clear that the company
never expected her to do that, she said.

Yet Brown was deeply affected by a wave of customers telling her of
their stress and worry when they couldn’t reduce their debt.

Robert Jones, an elderly Black man who lives on fixed income in
Columbus, was one such customer. He used TitleMax multiple times when
he was facing medical debts from his treatment for emphysema. In the
more than two years of making monthly payments to the company, Jones
said, he dealt with at least four different managers, and Brown was
the only one who cautioned him about adding on to his debt load of
$2,000 to pay for a new, expensive medicine with an additional title
pawn. Brown “worked hard to help me understand which way was up”
in what he saw as confusing contractual terms, Jones said.

Still, Jones eventually had to borrow more money from TitleMax because
of his lingering medical debts, a move that compounded his struggles
to get out of what he called his “debt trap” with the company.

In other cases, Brown decided to be even more proactive in helping
customers find solutions to their debt problems.

In November 2019, Brown advised four longtime TitleMax customers, each
of whom owed around $10,000, about securing an installment loan with a
lower interest rate from another lender to pay off TitleMax. When they
did, Brown’s Columbus-area district director noticed these lump-sum
payoffs. He then chastised Brown for losing what had been high-paying
repeat monthly accounts, according to a text message reviewed by The
Current and ProPublica. The district director told her to “stay
aggressive,” according to the text exchange.

“Our customers are decent, hardworking people. They aren’t
bums,” Brown told The Current and ProPublica. “But to TitleMax,
they just have one purpose: money.”

In February 2020, TitleMax asked Brown to move to Savannah and take
over a struggling store there. She was nervous — the city was more
than four hours away from her family — but she took the offer that
she believed would bring her another promotion. She had dreams of
being the first in her family to buy a home, and a career at TitleMax
was a way to achieve that.

But Brown couldn’t square the idea of getting ahead personally with
what she was starting to believe was an ambiguous business model. That
understanding solidified that spring when a new assistant manager was
assigned to her store.

Welsh Lupica was mustering out of the Air National Guard just as the
global economy was shutting down because of the COVID-19 epidemic. He
needed a job to help pay the bills, and TitleMax, which had been
declared an essential business by Georgia Gov. Brian Kemp, was hiring
as industries across the state remained shuttered.

Welsh Lupica went through his TitleMax training with a more jaundiced
eye than Brown had. He recalled asking during his training whether
TitleMax used predatory practices and whether TitleMax was among the
title lenders that had actively lobbied against a push to cap interest
rates in Nevada at 36% to protect consumers against high-interest
subprime lenders.

“In the military, I got a lot of financial education. We were always
targets for that kind of crap,” Welsh Lupica said, referring to
predatory lenders. The Pentagon, alarmed by the national security
risks posed by the number of service members struggling to pay off
debt, worked to strengthen federal laws protecting them from
high-interest financial instruments, including title loans. “I
wanted to know, ethically, what I was signing up for.”

Welsh Lupica said he was assured that TitleMax worked within the law,
and that the company was a community asset.

Welsh Lupica began to feel differently, however, soon after he went to
work with Brown at the TitleMax store on Skidaway Road in east
Savannah, a mile away from Georgia’s first historically Black
university and surrounded by leafy neighborhoods where a mix of
working-poor and professional Black families lived.

Welsh Lupica and Brown formed a quick attachment as she taught him, a
white man, how to gain the trust of their majority Black customers.
That included tutorials on how to talk to older Black people, to drop
some of his ramrod military formality and to be more self-deprecating
in the store.

Brown, meanwhile, said Welsh Lupica opened her eyes to how the sales
techniques that TitleMax had taught them as standard business
practices confused customers about the true costs of a title pawn.
Welsh Lupica explained to her how the minimum monthly payments that
the company told them to emphasize with customers would lead people
into a debt trap. Those minimal monthly payments would never decrease
the principal, he told her.

“Customers who come to us looking for $2,000 or even $200 are not
the type of people who can pay back that money at the end of the
month. I knew that my customers would be paying month after month
after month, but I didn’t realize how impossible it was,” Brown
said.

Venus Lockett, a single parent who lives near Atlanta, turned to
TitleMax when she couldn’t get a traditional loan because of her low
credit score. The Atlanta-area store she dealt with never offered a
printed contract, she said, and it took multiple trips dealing with
multiple managers to get a clear sense of her debt.

Lockett said she would definitely have thought twice about signing a
title pawn contract had she received the type of transparent sale
pitch that Brown and Welsh Lupica offered. “You walk into TitleMax
because you are desperate for any help to keep your kids warm and fed.
But even desperate people can hear, if they are told plainly, what a
terrible deal” a title pawn is, Lockett said.

In the spring of 2020, Brown decided to implement more transparency
before customers signed their contract, something she saw as
beneficial for them and the company. “We were there to make money
for ourselves and TitleMax, and we could do that by building trust
with the customer,” Brown said.

One such strategy was to print the sales contract — the only
document that showed the annual interest rate — for customers before
they signed it. Verbally, Brown and her team continued to talk about
the monthly payments but described that as a fraction of the total
annual cost of borrowing. They also clarified with customers that the
minimum payment due each month would only cover interest, and that
larger monthly payments would be necessary to get rid of the
principal. “I would tell them, ‘I don’t care if you only have an
extra dollar or $5, you need to give that to me as well,’” Brown
recalled. “‘Otherwise, I’m going to see you in here month after
month until the day you die.’”

The standard TitleMax procedure is to simply show customers contracts
on a digital screen, not in a physical copy, according to the three
former store managers. The only time a customer sees the annual
interest rate is on the final contract, they said.

The third former store manager, who worked at two other TitleMax
locations in south Georgia, confirmed that the sales techniques
adopted by Brown and Welsh Lupica were not part of TitleMax’s
standard routine. “We were trained to keep customers paying [their
monthly interest], not how to tell the customer how to pay off the
loan,” the former store manager said.

By late spring, however, the company got wind of the transparent sales
pitch that Brown and Welsh Lupica had adopted — and communicated its
disapproval, they said. Brown said her relationship with the company
deteriorated, as she became emboldened to speak up against what she
saw as workplace problems and to advocate for customers struggling to
pay their title pawns.

Welsh Lupica, meanwhile, was transferred in June 2020 out of Brown’s
store. He was sent to TitleMax’s flagship store in Savannah, which
serviced over a million dollars in customer accounts each year. He
didn’t adhere to the hard-nosed sales techniques that were routinely
employed there, such as trying to get customers to agree to a higher
amount of financing than they said they needed.

Instead, Welsh Lupica tried to continue the practice he had adopted at
Brown’s store. But he said he was reprimanded and told to stop,
especially his habit of printing the sales contracts for customers.

Feeling uneasy about the business practices, Welsh Lupica resigned in
September 2020. “Most people who come to us are financially
challenged,” said Welsh Lupica, who is now a Chatham County
firefighter. “They rely on trust with the store manager.”

As 2020 continued, Brown became increasingly disillusioned with her
work, especially with how the company dealt with Black employees and
customers.

The pandemic was ravaging Georgia’s Black community — yet TitleMax
did not pay for COVID-19 tests for employees in south Georgia,
according to the three former store managers. Brown also complained to
human resources and her district director that she had to work a full
month without a day off or lunch breaks, while white managers in
nearby stores were granted those basic rights, according to a civil
rights discrimination lawsuit she later filed against the company, as
well as the emails and text messages reviewed by The Current and
ProPublica. Welsh Lupica confirmed Brown’s predicament. “Black
employees were treated differently. I saw it happen,” he said.

The company also ignored pleas from Brown to try to evict a group of
suspected drug users who slept in her store’s parking lot and made
her and other employees feel unsafe, according to Brown’s lawsuit,
as well as the reviewed company communications.

In October 2020, Brown was physically attacked as she was closing her
store for the night, according to medical records and company
communications. She took a leave of absence and returned to work in
February 2021 because she needed a paycheck.

Brown said she resumed her practice of transparently explaining the
true costs of borrowing to her customers. But she hit a wall a couple
of months later when an elderly Black woman came into her store. Brown
remembered watching the woman struggle painfully to walk from the
parking lot to discuss her overdue account. The woman had had a
stroke, she explained, and TitleMax had repossessed her car while she
was in the hospital. Brown fought successfully with the company to
have it pay $200 for a towing company to return the customer’s car.
Yet what Brown saw as a decision affecting her customer’s life, the
company seemed to view it as a mere accounting issue, according to
company communications reviewed by The Current and ProPublica.

For Brown, that was the last straw. She filed a workplace grievance
with the EEOC, alleging racial discrimination by TitleMax. In her
claim, Brown listed multiple occurrences of what she described as
unequal treatment she received as a Black woman compared with white
colleagues, including being passed over for a promotion, unequal
enforcement of the rules for breaks and vacation, and the use of
racially insensitive language by her superiors.

In June 2021, TitleMax fired her, citing multiple violations of
protocol, including once mistakenly repossessing a wrong vehicle.

Seven months later, the EEOC closed Brown’s complaint, declining to
rule either for Brown or for the company. “The EEOC makes no finding
as to the merits of any other issues that might be construed as having
been raised by this charge,” the final report said. Employment and
labor lawyers in Georgia say the EEOC rarely pursues the thousands of
complaints it receives each year, leaving aggrieved workers in limbo
about their allegations of discrimination. The EEOC declined to
comment on the case, citing confidentiality.

At least two other former TitleMax employees in Georgia have sued the
company in the last 10 years alleging racial discrimination or sexual
harassment after filing EEOC complaints. One case was settled, but its
terms are unknown. The other was dismissed before the discovery phase.
The company’s employment contract had a mandatory arbitration clause
— a closed-door dispute mechanism that companies often use to
prevent workplace allegations or criticisms from becoming public. The
EEOC declined to provide the total number of complaints filed against
TitleMax, citing privacy laws.

In April, Brown filed her lawsuit against the company in the federal
district court for the Southern District of Georgia, hoping that the
courts would take her complaints more seriously. TitleMax never
replied to the substance of Brown's allegations and instead argued for
the case to be thrown out on procedural grounds. This month, the judge
dismissed the case, which Brown filed on her own and without legal
counsel, for technical reasons, faulting her for not presenting the
legal complaints in a professional or appropriate manner. He did not
rule on the merits of the case.

Brown also emailed a letter to the CFPB, citing her allegations of
racial discrimination and TitleMax’s business practices as potential
violations of federal law. But she did not use the dedicated email
portal or phone number
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that the CFPB spokesperson said the agency encourages whistleblowers
to use, and she has not heard back from the federal regulator. The
CFPB declined to comment on Brown’s allegations, citing the ongoing
consent order with TitleMax.

Brown now works for another Savannah-based company that sells
furniture to elderly residents with mobility issues. She makes less
money but feels better about work at the end of the day. At least one
former TitleMax manager also works at the business, and they often
swap stories about their shared experience.

“You can make money and be honest with your customers,” Brown
said. “That’s the bottom line. In seven years at TitleMax, I
didn’t see a single supervisor who understood that and wanted to do
business in that way.”

Mollie Simon [[link removed]]
contributed research.

* debt
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* predatory lending
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