Lenders who take title to cash-strapped customers' cars for short-term loans that charge up to 300 percent annual interest are taking advantage of weak state laws and loopholes, a new lending practice survey concludes.

"States that fail to protect their consumers from one-sided title loans should repeal or reform their laws as Kentucky and Florida recently did," Jean Ann Fox, Consumer Federation of America consumer protection director, said Thursday in releasing its study. The report, based on checks with title lenders in 11 states and online, found that:

_ Online lenders operate through Delaware and New Mexico, where lax regulation lets them sell title loans nationwide.

_Lenders make loans that are too small to trigger loan-size caps that draw oversight by California and South Carolina, states that ostensibly curbed title loans.

_ Lenders get around state limits on small loans by Iowa, Kansas and Virginia by claiming their loans are open-ended.

_ Tennessee and Mississippi foster abusive loans by allowing loans for up to $2,500 due in 30 days.

_ Georgia lets title lenders keep all proceeds from selling repossessed cars.

Illinois regulators report that title lenders typically target "captive" borrowers who cannot afford a house or qualify for credit cards, but suddenly confront a cash crisis.

That's what happened to Sharon Jones. The 54-year-old Georgia woman recently urged state lawmakers to enact title loan limits, telling how she's paid $1,365 toward her $500 title loan because her disability check only covers interest payments. But title-loan industry executives testified that tougher laws will put them out of business and deny cash-strapped Georgians like Jones access to their lender of last resort.

So many military families have been victimized that the Defense Department asked state lawmakers this year to toughen lending laws so service members won't "unadvisedly approach lenders for short-term relief."

"A title loan is not the way to get back on your feet if you're having financial problems," the Military Spouse Career Center, a Pentagon contractor, counsels. "It's a trap that's likely to pull you deeper into debt."

"The military's an especially ripe target" because of the rank-and-file's relative youth, lack of financial sophistication and concern that money problems could cost them advancement, said Steve Tripoli, co-author of a National Consumer Law Center report on businesses that victimize military families.

New Mexico Attorney General Patricia Madrid cites car-title and payday lenders who surround Kirtland Air Force Base and other installations in her proposal to invoke the state's Unfair Practices Act against title lenders. The New Mexico legislature tried and failed twice to crack down on the industry.

"Lending money at what amounts to 350 percent (annual percentage rate) or more should not be tolerated: If the payday and car-title loan industry wants to maintain that such exorbitant rates are necessary to do business, it is business that is not worth doing," said Madrid, who will act after the public comment period closes Monday.

In citing the success of Florida and Kentucky in bringing the title loan industry under state usury limits, the Consumer Federation's Fox didn't mention Kentucky's near miss: One Georgia-based company tried to call all its existing Kentucky loans before closing shop there, forcing borrowers to pay up immediately or risk having their cars seized, Kentucky Assistant Attorney General Todd Leatherman said at the time.

Florida Attorney General Charlie Crist urges consumers to consult a credit counseling agency, borrow from family or seek help from a charity or government agency before taking out a title loan that could cost your car and financial future.

(Contact Mary Deibel at DeibelM(at)shns.com)