First American Title Lending settles Georgia case for $225,000.

A Georgia title pawn company is paying about $225,000 to settle allegations that it sued customers who defaulted on loans, threatened customers with arrest warrants and misrepresented itself in advertisements.

Georgia Attorney General Chris Carr announced last week that First American Title Lending of Georgia will make the payment in response to allegations that it violated consumer protection laws.

Companies like First American use the title on customers' vehicles as collateral for short-term, high-interest pawn transactions, according to Carr's office. While pawn companies can repossess vehicles if customers default on their payments, these companies aren't allowed to threaten customers or sue them for outstanding principal, interest and fees.

The settlement requires $196,574 in restitution to First American’s customers, dismissal of lawsuits against customers and $25,000 in penalties paid to the state.

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