MA AG Healey Takes On National Subprime Auto Lender In Lawsuit

BOSTON, MA — Massachusetts Attorney General Maura Healey filed a lawsuit against national auto lender Credit Acceptance Corporation. The company is accused of misleading Massachusetts investors and selling unfair and illegally high interest loans, among other things.

Starting in 2013, CAC failed to inform investors that the company topped off the pools of loans that they packaged and securitized with higher-risk loans, despite claiming otherwise in disclosures to investors, according to the complaint.

The complaint also claims CAC made high-interest subprime auto loans to Massachusetts borrowers that the company knew borrowers wouldn't be able to repay. As a result, borrowers credit was ruined, some lost their cars or down payments, and they were left with an average of approximately $9,000 of debt. Borrowers also got hit with hidden finance charges, bringing CAC loans up past the usury rate ceiling of 21 percent mandated by state law.

“This company made unaffordable and illegal loans to borrowers, causing them to fall into thousands of dollars of debt and even lose their vehicles,” said AG Healey.

The lawsuit also claims the company used illegal measures to collect debt from defaulted borrowers, including sending faulty notices to borrowers with repossessed vehicles, harassing consumers with unlawfully repetitious collections calls, and overcharging consumers on their deficiencies.