LOUISVILLE, Ky. (WAVE) – Kentucky law allows triple-digit interest rates on certain loans. The logic of the 1960s law was simple. Consumers have the option of paying the price in cash or the price on credit, but the price on credit can more than double the total bill.
When Big O Tires applied for a loan on Debbie Pollock’s behalf from EasyPay Finance, she unknowingly accepted a 164% APR loan. She contacted WAVE repairers to find out how this rate could be legal, and she is not the only one.
“If I had known I was paying $1,100 for $500 tires, I never would have,” Crystal Hall said.
Hall said she bought four new tires and an oil change at the Big O Tires location that burned down in 2020. She owed $536 and instead of maxing out her Big O Tires card, she decided to opt for EasyPay Finance.
“I thought I would go through EasyPay because I thought it would be easy,” Hall said.
She said she planned to pay her $536 bill in installments. However, when the money was withdrawn from her checking account, she was paying $95 per month. Her then-husband calculated that she would pay a total of $1,135 – 168% APR to be exact.
“Over 100% APR for this,” Hall said. “It’s ridiculous. It was not explained to me at all when buying these tyres. I feel very taken advantage of.
“That seems very high,” Kentucky House Banking Committee Chairman Bart Rowland said. “It’s a question that is new to me, surprisingly five terms, ten years of parliament, it’s the first time.”
When lawmakers passed the current law in 1962, a University of Kentucky law professor suggested going further and including an interest rate cap, as is done in six other states.
“Presumably the sky is always the limit,” Charles Whitehead wrote at the time, and it still is. Kentucky caps interest at 36% for certain loans, but installment loans have no cap. Rowland said lawmakers could consider other Kentucky laws as a starting point.
“These are always complicated issues when they arise, but you can look at what’s been done with consumer loans, payday loans, that’s a good place to start,” Rowland said.
The Legislature ends its session for this year, but consumers like Pollock and Hall want to see something happen.
“I had a limited income at that time,” Hall said. “We were counting pennies just to buy.”
Crystal’s $1,100 tires won’t do her any good either. She said she had a wreck on I-65 in March and her car was now seized, tires and all, waiting to be auctioned or scrapped.
WAVE contacted Big O Tire’s parent company about these high-interest loans. A spokesperson wrote:
“Big O Tires, LLC is a franchisor and does not own or operate Big O locations except on rare occasions. However, Big O cares about every customer served by a franchisee. A typical franchisee offers several financing options for ensuring it can help all customers, regardless of income or credit status, with their automotive needs.EasyPay Finance is a source of finance that some franchisees choose to make available to their customers.EasyPay Finance has a strong reputation in the credit finance industry and has demonstrated a commitment to transparency and full disclosure with its customers in its business practices.
We cannot speak in detail about how each of the 466 Big O sites disseminates information; however, Big O understands that all details of EasyPay Finance are disclosed to those who decide to use the product prior to loan acceptance and that any process used complies with all laws, including the Truth in Lending Act. Big O also expects its franchisees to ensure that their employees follow all laws, have a customer-first mentality, and are open and honest in all dealings, including EasyPay Finance options. Big O will have their operations team investigate this matter and we thank you for bringing this to our attention.
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