Subprime Auto Lender Credit Acceptance to Pay $694 Million in 41-State Settlement Over Loans Borrowers Could Not Afford
Virginia Attorney General Jay Jones announced that subprime auto lender Credit Acceptance Corporation has agreed to a $694 million settlement, in cash and debt relief, with Virginia and 40 other state attorneys general.
The states alleged that Credit Acceptance originated auto loans it knew, or should have known, many consumers could not afford, leaving borrowers facing delinquencies, repossessions and damaged credit. The settlement provides restitution and debt relief to affected consumers.
Under the agreement, Virginia consumers will receive more than $2 million in restitution and more than $17 million in debt relief.
Beyond the money, the settlement imposes injunctive terms: the company must disclose loan risks more clearly, provide protections against bad outcomes for borrowers on certain risky loans, and guard against dealer 'packing' of add-on products such as vehicle service contracts and GAP coverage into loans.
The attorney general's office reminded consumers to review the interest rate, term, total monthly obligation and add-on charges before signing an auto loan, and to ask dealers to explain each fee and decline unwanted add-ons.
Source: GSM · USA (original Chinese edition)
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