What are the red flags that EZCorp is a loan shark or not

EZCorp is not a traditional "loan shark" in the sense of an underground criminal operation. They are a publicly traded company on NASDAQ. However, their past behavior included practices that look very much like what you would expect from predatory lenders.

Let me walk through the red flags one by one.

Red Flag #1: History of Illegal In-Person Collection Visits

What the CFPB found: EZCorp sent debt collectors to consumers' homes and workplaces. These visits risked exposing the consumer's debt to neighbors, coworkers, and employers .

Why this is dangerous: Imagine you are at work. A collector shows up at your desk and asks about your loan in front of your boss and coworkers. That is what EZCorp was doing.

Current status: The CFPB barred EZCorp from future in-person debt collection . However, the company has since exited the US payday lending business. Pawn loans are non-recourse, so collection visits are not needed.

Your decision: If you are getting a pawn loan, this past behavior is less relevant because pawn loans do not involve aggressive collection. If you are using any other EZCorp product (like auto title loans in Puerto Rico), be aware of this history.

Red Flag #2: Contacting Third Parties (Employers, Landlords)

What the CFPB found: Debt collectors called credit references, supervisors, and landlords, and disclosed or risked disclosing debts to third parties. This potentially jeopardized consumers' jobs or reputations .

Why this is dangerous: A debt collector should never call your boss or landlord. This can get you fired or evicted.

Current status: EZCorp no longer operates payday lending in the US. For pawn loans, there is no collection activity at all .

Your decision: For pawn loans, not relevant. For any other product (auto title loans in Puerto Rico), be extremely cautious.

Red Flag #3: False Threats of Legal Action

What the CFPB found: In many instances, EZCORP threatened consumers with legal action. But in practice, EZCORP did not refer these accounts to any law firm or legal department and did not take legal action .

Why this is dangerous: Threatening a lawsuit you never intend to file is illegal. It is a scare tactic to pressure borrowers into paying debts they might not legally owe.

Current status: This practice was associated with their payday lending operation, which has been shut down in the US.

Your decision: If any lender ever threatens a lawsuit, ask for the name of the law firm and case number. Empty threats are a red flag.

Red Flag #4: Unauthorized Electronic Withdrawals

What the CFPB found: EZCORP would often make three simultaneous attempts to electronically withdraw money from a consumer's bank account for a loan payment: for 50%, 30%, and 20% of the total due. The company also often made withdrawals earlier than promised. As a result, tens of thousands of consumers incurred fees from their banks .

Why this is dangerous: Multiple withdrawal attempts can trigger overdraft fees. Early withdrawals mean money is taken before you expected it.

Current status: This practice was associated with their payday lending operation, which has been shut down in the US.

Your decision: Never give any lender direct access to your bank account for automatic withdrawals. Use other payment methods if possible.

Red Flag #5: Lying About Repayment Rights

What the CFPB found: EZCORP falsely told consumers in Colorado that they could not pay off a loan at any point during the loan term, or could not do so without penalty. Consumers could in fact repay the loan early, which would save them money .

Why this is dangerous: Lying to borrowers about their rights is deceptive and illegal.

Current status: This practice was associated with their payday lending operation.

Your decision: Always verify your rights directly with state law. Do not take a lender's word for it.

Red Flag #6: Recent Complaints About Pawn Operations

What the Better Business Bureau shows: Even in their pawn operations, there are complaints. One customer reported that a pawn shop incorrectly added someone else's pawned items to their account, and the company refused to correct the error .

Another customer reported that the pawn shop kept personal items (including a child's carseat) from their vehicle when they pawned a truck — items that were not part of the loan agreement .

Why this is concerning: Pawn loans are supposed to be simple: you pawn an item, you repay, you get it back. When companies take additional items or mix up accounts, that is a problem.

Your decision: Document everything you pawn. Take photos. Keep receipts. Write down serial numbers.

Red Flag #7: The 13% Interest Rate on Business Loans

What the SEC filing shows: EZCORP entered into a three-year, senior secured debt facility providing a subsidiary with $156.4 million in funding at 13% per annum .

Why this is concerning: 13% is high for a business loan. It suggests that even EZCORP's own businesses are paying substantial interest costs.

Your decision: Pawn loan interest rates vary by state. Ask what rate you are being charged before you pawn any item.