Class Action Alleges Riverside Pawn Charged Excessive Service Fees On Loans in Virginia

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A proposed class action claims that Riverside Pawn Co., Inc. has charged Virginia borrowers more than the allowable limit for service fees on their loans.

The 11-page case states that pawnbrokers such as Riverside, who operates pawn shops in Danville, Martinsville, Madison Heights and South Boston, Virginia, are prohibited by law from charging borrowers more than the lesser of five percent of the amount loaned or $3.00 for service fees. The lawsuit says Riverside Pawn has nevertheless maintained a business practice of always charging a five-percent service fee, even when that amount exceeds $3.00.

The plaintiff, a 68-year-old Amherst County, Virginia resident, says she obtained several pawn loans from Riverside Pawn in 2021 and, for each loan, pledged property and family jewelry. For one such loan made on April 7, the plaintiff borrowed $530 from the defendant and pledged 10 pieces of jewelry, the suit relays.

According to the case, Riverside charged the plaintiff a service fee, called an “ERM” fee, of $15.90. The lawsuit says that this amount exceeded the maximum $3.00 fee by $12.90 and was therefore unlawful.

The suit relays that in May 2021, the plaintiff paid off the amount due in full. Per the complaint, the excess $12.90 paid by the woman constitutes additional interest that caused her annual interest rate to exceed the maximum allowable amount.

The lawsuit argues that Riverside Pawn’s actions have caused consumers to overpay for ERM fees and interest, either in cash or by the defendant retaining their property.

The plaintiff looks to represent borrowers from any of Riverside Pawn’s Virginia locations who obtained loans from Riverside with an ERM service fee of $3.01 or more and paid that fee in cash or by the pawn shop retaining their property within the past two years.

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