Acme Title Pawn
Group: KPSN Consultants
Summary of case
Ethical issues present in the case
Discuss dilemma faced by decision makers in the case
Application of Ethical theories
Acme Title Pawn was in the business of providing loans to a target market consisting of mostly high risk customers, example, gamblers, persons with little or no credit history and those with poor credit history, predominantly from the minority groups such as African American (mostly migrants) and Hispanic communities (low income earners).
High staff turnover despite attractive compensation packages.
In sync with the title loan industry, Acme presents itself as a ‘headache-free’ business simply because they catered to persons having challenges obtaining financial help with the likes of banks and other reputable lending institutions.
To obtain a loan, customers were asked to simply present a motor vehicle title that would be used as security. Due to the risks involved, loans were capped at a maximum of fifty percent (50%) of the blue book value of the vehicle.
Acme Pawn operations were essentially in States which had legislation allowing at least 22% interest rate to be charged as the company charged twenty five (25%) interest rate to its customers. The company would pull out of states if the legislators changed this policy to lower interest rates.
The Company believed in adequately compensating its staff hence high salaries were paid, yet there was a grave concern regarding the high staff turn-over experienced.
The Company had its share of challenges in how it conducted its business affairs. How it viewed its obligations to customers and its role as an “ethical corporate company”.
Joe Scruples, a father and husband, is a current employee of Acme Title Pawn and has had his fair share of employment challenges throughout his working life.
He viewed joining Acme as the ultimate move for his career as he held the Company in high esteem. He soon realized that not all that glitters is gold.
Joe is at a cross roads.
Ethical issues in the case
Senior managers ignoring the misappropriation of company’s funds; executives at Acme Title Pawn would regularly charge personal expenses such as phone bills, courier service fees and even movie rentals to the company’s credit card. Joe upon realizing this reported it to the Accounts Manager, however there was no action taken.
Chain of command was ignored within the organization; whenever there were any staff issues or conflicts, they were not reported to the immediate supervisor; they were instead reported to higher levels than were necessary. This undermined the authority of the immediate supervisor and fostered back stabbing.
Staff members regularly borrowed from the company’s accounts without any loan agreement or payment scheduled being put in place. No approval was given by the CEO.
Withholding customers’ funds from vehicle sales; it was the policy of Acme Title Pawn to issue loans to a maximum of fifty percent of the vehicles’ book value. If there was any default in payments Acme Title Pawn would seize and sell the vehicle. The excess proceeds, if any, should rightfully be returned to the owner; however this was only done if the debtor called to query the outstanding amount or if State law specifically demanded its return.
Deception- Anything that substantially interferes with the ability of people to make a rational decision (Boatright, 2009). Acme Pawn’s actions leaned towards deception in their non disclosure of their high interest rates and also the non disclosure of the lack of return of the excess from vehicle sales
Acme and Joe’s Dilemma
How can they create a morally sound company?
How can they improve the service to their clients?
Will his personal moral standards conflict with lack thereof...
References: Boatright, J.R. (2009). Ethics And The Conduct Of Business. Upper Saddle River, NJ: Pearson Education, Inc
Acme Title Pawn, Case Study Solution. (2011). Available from
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