United States: Subprime Auto Lender Settles Claims of Unfair and Deceptive Practices for $ 27.2 Million
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- Massachusetts AG Maura Healey has entered into an agreement with the national subprime auto lender Credit Acceptance Corporation (“CAC”) to resolve allegations that CAC engaged in unfair and deceptive practices in creating, collecting and titling auto loans at risk in violation of the Massachusetts Consumer Protection Act.
- As previously reported, the complaint alleged, among other things, that the CAC made subprime loans that it knew borrowers could not repay, causing many borrowers to suffer credit damage and the loss of their vehicles. or down payments, charged hidden financing fees that resulted in CAC loans exceeding the state law’s usury limit of 21%, and failed to notify investors that its loan pools included loans presenting a higher risk than that described in its disclosures.
- Under the terms of the Opt-Out Assurance, CAC has agreed to pay $ 27.2 million to an independent trust that will be used for the return of thousands of eligible clients as well as the payment of settlement implementation fees and claims. GA office investigation costs. CAC has also agreed to comply with Massachusetts laws and regulations with respect to loan initiation and management practices, including providing borrowers with appropriate information and advice, and has agreed, at the request of the GA , to contact the credit bureaus to request the removal of certain negative credit information. on its customers, among others.
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