Credit Acceptance Corporation settles dispute over allegations of unfair practices for $ 27 million

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Good news for more than 3,000 borrowers across Massachusetts after a settlement with Credit Acceptance Corporation (CAC) is resolved over allegations of unfair practices.

According to court documents filed in Suffolk Superior Court on Wednesday, the CAC is required to pay more than $ 27 million and provide debt relief and credit repair to thousands of Massachusetts borrowers.

Thousands of Massachusetts consumers, many of whom are first-time car buyers, have trusted CAC to help them with a car loan, but have instead been drawn into high-cost loans, have gone deeper into debt and even lost their vehicles, Massachusetts said. Attorney General Maura Healey. With this massive $ 27 million settlement, qualifying Massachusetts drivers who have suffered under the weight of a crushing car loan due to CAC’s deceptive practices will be able to receive relief and avoid further defaults. Bad auto loans, like bad student loans or bad mortgages, hurt families and communities. Through our extensive and ongoing investigation of the subprime auto industry, we have proven our ability to take action and get results for our residents who have been exploited by unscrupulous lenders.

Healeys’ office sued the CAC in August 2020 for allegedly granting high interest subprime auto loans that it knew or should have known that many borrowers would be unable to repay.

Those eligible for settlement funds include residents of the communities of Springfield, Boston, Worcester and Brockton.

The lawsuit also noted that while the company took advantage of these loans, borrowers suffered credit damage and in some cases lost their vehicles or down payments. The complaint also alleged that some CAC borrowers were subject to hidden finance charges, resulting in violations of the states 21% usury limit and that CAC engaged in illegal collection practices.

The regulations also require CAC to make changes to its loan management practices.

Borrowers eligible for relief under the settlement will be contacted by Healeys’ office, according to its spokesperson. But adds that those with questions about settlement eligibility should contact AG’s insurance and financial services division at 617-963-2240.

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