ATLANTA \u2014 Thousands of Georgia consumers will receive financial relief under a multistate settlement with an auto financing company.<\/p>\n
The company is accused of issuing loans to people it allegedly knew could not afford them and adding unnecessary costs to their agreements.<\/p>\n
Georgia Attorney General Chris Carr announced that Credit Acceptance Corporation has agreed to a settlement with 41 attorneys general that will provide $694 million in cash and debt relief nationwide. Of that amount, $28 million will go directly to 4,890 Georgia consumers.<\/p>\n
The settlement is expected to provide a variety of forms of relief. Some consumers whose vehicles were repossessed will receive cash payments, while others will have outstanding loan balances forgiven.<\/p>\n
The lawsuit filed by Georgia alleged that Credit Acceptance \u201cengaged in deceptive, unfair, and abusive business practices when offering subprime auto loans to Georgia consumers.\u201d<\/p>\n
\u201cReally transactions that were built to fail,\u201d said Sarah Mancini, an attorney with the National Consumer Law Center.<\/p>\n
According to the complaint, Credit Acceptance\u2019s internal data showed the company knowingly approved loans for consumers who had a high likelihood of defaulting.<\/p>\n
\u201cThey alleged that Credit Acceptance knew with a high degree of certainty that certain people were going to default and they made them loans anyway, with a profit motive,\u201d Mancini said..<\/p>\n
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The complaint also alleged the company added unnecessary charges and costs for products such as service agreements and warranties.<\/p>\n
Court filings stated that many consumers \u201cwere unaware they were purchasing the products, did not understand that the products were optional, or were led to believe the products must be purchased to get financing.\u201d<\/p>\n
The settlement focused on loans made to so-called subprime borrowers, consumers with lower credit scores or incomes who may have limited access to traditional financing options.<\/p>\n
\u201cThese are the most vulnerable people who are trying to get ahead, trying to get some economic stability, who are being targeted by a business model that was built to fail and that would leave them worse off in the end,\u201d Mancini said.<\/p>\n
Credit Acceptance does not admit wrongdoing as part of the settlement. In a letter from its CEO posted on the company\u2019s website, the company said consumers eligible for relief will be contacted by mail either by Credit Acceptance or by an administrator working on behalf of the participating states.<\/p>\n
In addition to consumer payments and debt relief, the consent agreement requires Credit Acceptance to make changes to its business practices going forward.<\/p>\n
Credit Acceptance CEO Vinayak Hegde wrote, \u201cThe settlement includes certain commitments related to customer disclosures, dealer oversight, and consumer protections, many of which reflect practices we already have in place today.\u201d<\/p>\n
Consumers who believe they may be eligible for relief should watch for information sent through the mail regarding the settlement.<\/p>\n
\u00a92026 Cox Media Group<\/p>\n","protected":false},"excerpt":{"rendered":"ATLANTA \u2014 Thousands of Georgia consumers will receive financial relief under a multistate settlement with an auto financing…\n","protected":false},"author":2,"featured_media":853020,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[360253,28,76384,360254,360255,360252,681,111825,360258,186055,10075,153204,153206,3729,360257,360256,33927],"class_list":["post-853019","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-attorney_general","tag-business","tag-channel_2","tag-chris_carr","tag-credit_acceptance","tag-credit_acceptance_corporation","tag-georgia","tag-georgians","tag-gray_channel_2","tag-gwinnett_county","tag-justin","tag-justin_gray","tag-linda","tag-local","tag-national_consumer_law_center","tag-sarah_mancini","tag-wsbsyndication"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/853019","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=853019"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/853019\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/853020"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=853019"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=853019"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=853019"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}