3,000 Massachusetts residents victimized by predatory subprime auto loans eligible for repayment
More than 3,000 borrowers across Massachusetts who fell victim to a predatory subprime auto loan company may be eligible for repayment in a $ 27.2 million settlement, Attorney General Maura said Healey.
“Thousands of Massachusetts consumers, many of whom are first-time car buyers, have trusted CAC to help them with a car loan, but have instead been drawn into high-cost loans, have gone into deeper debt. and even lost their vehicles, ”Healey said. during a Zoom press conference Wednesday with three consumers targeted by the company.
She added: “With this significant $ 27 million settlement, qualifying Massachusetts drivers who have suffered under the weight of a crushing car loan due to CAC’s deceptive practices will be able to receive relief and avoid new ones. payment defaults. “
The Suffolk Superior Court’s settlement with the national subprime auto lender Credit Acceptance Corporation is the largest settlement of its kind, Healey’s office said.
People who bought cars with loans through accepting credit received money at interest rates that met or exceeded the state’s 21% limit, Healey said. The lending company also engaged in illegal collection practices, according to the settlement.
Healey said many consumers hurt by these lending practices live in cities like Springfield, Boston, Worcester and Brockton, where they used the subprime mortgage crises that toppled the US economy over a decade as a ‘plan’ to ‘take advantage of some of our most vulnerable residents.
“These were loans that these clients could not afford to repay, but they still made them,” she said.
Under the regulations, thousands of borrowers who received auto loans through an acceptance of credit could be eligible for repayments or debt relief. The lender has also agreed to change its lending and debt collection practices, according to Healey.
Frank Mello told reporters he bought a car using a credit acceptance loan in 2018 to drive to and from work within an hour of his home. At an interest rate of 20.99%, Mello said he quickly fell behind schedule and endured constant collection calls around the clock, day and night as well as frequent repossessions of vehicles until that he lost the car for good in 2019.
“It’s been hurting me for a long time and I’m trying to get over it,” Mello said.