News 12 at 6 o'clock / Thursday, Aug. 1, 2013
AUGUSTA, Ga. (WRDW) -- After facing financial hardship, an Augusta woman says she took out a title loan on her car. Now it could have devastating effects on her life.
"The water was due, the light bill was due and the gas bill was due," said Mildred Armour.
On a fixed income and strapped for cash after unexpected medical bills in January, Armour says she borrowed $4,000 on her car's title.
"It sounded so remarkable. Unique that they are helping people," Armour said.
But facing more hardship last month she says the company offered her additional money to pay a bill, only after agreeing to a new two-year loan, raising her monthly payments from $390 to $413.
But this week, she got another shocker.
"I have a tag from my vehicle," Armour said.
And that is all after she says despite a 30-day late payment grace period, her car was repossessed.
"Only thing they telling me now is I want $4,432," Armour said.
Or she says they will sell her car with her still owing thousands on the loan.
Gigi Turner with Augusta's Better Business Bureau says consumers should know exactly what the high interest rate means because not paying it in full causes the interest to roll over.
"To involve yourself in this type of loan is if it is an emergency and you realize, you understand that I can pay this off before the term ends," Turner said.
Or she says risk facing interest rates as high as 300 percent.
Meanwhile, Armour says she feels betrayed.
"It's hard fighting back tears, but I have to. I have to be strong, but it's not easy," Armour said.
The BBB says those who are targeted by these companies are those with bad credit, senior citizens, members of the military and low-income folks.
Consumer counselors suggest borrowing from family or friends first. They say otherwise you risk a snowball effect because without a car, you cannot get to work, school or even medical care if needed.