TitleMax Targeted Hundreds of US Soldiers With Illegal Predatory Loans, Lawsuit Alleges

Under the law, United States soldiers and their families have special protections from loan sharks – to make sure they don’t suffer undue financial stress while on active duty. 

But one active-duty member’s wife alleges she was illegally targeted by TitleMax with loans that not only charged her more than 100% annual interest rate, but also took their car as security. 

Plaintiff Courtney Blackmon filed a proposed class action lawsuit against TitleMax and TMX Finance on Feb. 21 in a Georgia federal court, alleging violations of the Military Lending Act. 

She’s demanding the court void the TitleMax and TMX high-interest title loans “made to hundreds of soldiers.”  

What Is the Military Lending Act?

The Military Lending Act was enacted in 2006 to safeguard active-duty service members and their families from predatory lending practices. It helps make sure that military personnel can focus on their duties without facing financial hardship resulting from high-cost loans and exploitative lending practices.

The federal law provides special protections for active duty servicemembers and their dependents, like capping interest rates on many loan products to no more than 36%.

Blackmon says TitleMax’s loans violated the law by charging interest way above the 36% cap, by including an arbitration clause, and by using their car as security for the loans. 

Two pricey loans 

Blackmon went to TitleMax in 2021 and 2022 for two loans, she alleges. Both were used to cover her household’s debt and expenses, she says.

While the loans – of $2,518 and $1,318 – should not have been charged at an interest rate higher than 36%, Blackmon alleges both loans were charged at rates of between 100 and 152% APR. She also alleges both loans were secured by the couple’s 2018 Chevrolet, and were due to be repaid within 30 days. Over the next two years, she says she refinanced 14 times. 

On her second loan, she says she made payments totalling approximately $13,500 towards unlawful interest and principal. 

A practice of predatory lending

The lawsuit alleges TitleMax’s business practices shown in its dealings with Blackmon are part of a “systematic nationwide scheme” that violates the law for all TMX loans given to active-duty service members.

TMX operates under several trade names including TitleMax, InstaLoan and TitleBucks. and is located in 15 states with over 1,100 stores, the lawsuit states.

Blackmon argues that any loan that violates the Military Lending Act should be declared void. As such, she’s seeking for all illegal loan agreements with TMX to be voided, plus certification of the class action, damages of $500 per violation of the law. 

She is also seeking an order preventing TMX from lending to active-duty personnel and their dependents with interest rates higher than 36% or using their cars as security.

Blackmon is looking to represent anyone covered by the Military Lending Act in the United States who entered into a pawn transaction disclosure statement and security agreement with the company in the past five years.

The plaintiff is represented by Justin T. Holcombe, Kris Skaar, James M. Feagle, Cliff R. Dorsen, and Chelsea R. Feagle of Skaar & Feagle LLP; and Brian Warwick, Janet Varnell, and Christopher J. Brochu of Varnell & Warwick P.A.

The TitleMax predatory lending class action lawsuit is Blackmon et al v. TitleMax of Georgia Inc. d/b/a Titlemax and TMX Finance LLC, Case No. 4:24-cv-00049-WMR, in the U.S. District Court for the Northern District of Georgia, Rome Division.