The Attorney General’s office in Massachusetts and in New York filed Lawsuits against Credit Acceptance Corporation for using deceptive practices on consumer auto loans, in fact committing Consumer Fraud. The links are provided below for more information on both cases on the Federal Consumer Protection Bureau’s website.

It is time to stop these practices in the State of Rhode Island and give back to those victims stuck in high interest loans and/ or are in danger of repossession, losing access to transportation that some have been paying for years. These are some of the following practices:

Hiding the true cost of credit: Since 2014, Credit Acceptance’s loan agreements nationwide have said that consumers would pay interest at an average 22% APR. However, the true cost of credit offered is far higher than what borrowers are told. This is because Credit Acceptance’s business model pushes dealers to manipulate the prices of vehicles sold to Credit Acceptance borrowers, based on borrowers’ projected performance. This increases the principal balance of the loans. By hiding the true cost of the credit in inflated principal balances, Credit Acceptance evades state interest rate caps and deprives consumers of the ability to make informed decisions, to compare financing options, or to avoid high interest charges.

Setting up borrowers to fail: Credit Acceptance ensured its own profits by providing loans without regard to whether borrowers could afford them. For almost 4 out of 10 loans, Credit Acceptance predicted that it would not be able to collect the full amount financed by the loan. Credit Acceptance profits even when borrowers are unable to pay their loans in full by using aggressive debt collection methods. As a result of Credit Acceptance’s practices, customers faced late fees, repossessions, auctions, post-repossession collection efforts, lawsuits, and ruined credit profiles.

Closing its eyes to practices that harmed consumers: The company created financial incentives for dealers to add extra products to loans and then shrugged off whether customers were misled into thinking the add-on products were required. Add-on products, such as vehicle service contracts, are a profit center for Credit Acceptance. They represented about $250 million in revenue in 2020 alone.

If you or someone you know is in this situation, or if you want to stop companies from doing bad businesses and ruining the market, or just someone who knows what’s right and what’s wrong when it comes to economic equality then let’s stop this predatory lending by urging the Attorney General Peter Neronha in Rhode Island to take up this case and fight for economic justice.

Sign this petition

Call or file a complaint online at: https://riag.ri.gov/forms/consumer-complaint

and

https://www.consumerfinance.gov/complaint/

Lawsuit in New York

https://www.consumerfinance.gov/about-us/newsroom/cfpb-and-new-york-attorney-general-sue-credit-acceptance-for-hiding-auto-loan-costs-setting-borrowers-up-to-fail/

In Massachusetts

https://www.mass.gov/news/in-largest-settlement-of-its-kind-ag-healey-secures-27-million-for-thousands-of-massachusetts-consumers-from-subprime-auto-lender