More than 3,000 borrowers in Massachusetts could be eligible to receive money under a $27.2 million settlement Attorney General Maura Healey announced Wednesday with Credit Acceptance Corporation to resolve allegations that the subprime auto lender engaged in predatory loan practices that ruined the credit of many consumers. Healy, who has secured similar settlements with Exeter Finance and Santander over their auto loan practices, described the Credit Acceptance settlement filed in Suffolk Superior Court on Wednesday as the largest of its kind. Healey, in a video conference call with three consumers who purchased cars with loans through Credit Assistance, described a company that lent money to consumers at interest rates that met or exceeded the state’s cap of 21 percent, and then engaged in unlawful collection practices.
She said many of the consumers hurt by those lending practices lives in cities like Springfield, Boston, Worcester and Brockton. “These were loans these customers couldn’t afford to pay back but they made them anyway,” Healey said. Instead of learning from the subprime mortgage crisis, Healey said Credit Assistance and other auto loan companies used it as a “blueprint…to make a profit on some of our most vulnerable residents.”
Under the settlement, thousands of borrowers who received auto loans through Credit Assistance could be eligible for reimbursements or debt relief. The lender has also agreed to change its loan and debt collection practices, according to Healey. To read more click here.