Mass. AG Reaches $27M Settlement With Auto Lender, Allegations Included Violating State Call Limits

The Attorney General of Massachusetts has announced a $27 million settlement with an auto finance company that was sued back in 2020 for, among other alleged infractions, violating state law related to the number of phone call attempts that can be made when collecting on debts.

A copy of the settlement agreement with Credit Acceptance Corp. can be accessed by clicking here. Massachusetts Attorney General Maura Healey touted the settlement as the “largest settlement of its kind.”

The $27 million will go toward reimbursing consumers who were harmed by the lenders actions, paying for the costs of implementing the settlement, and covering the costs related to the investigation. About 3,000 customers of the auto lender will be eligible for some form of relief. Credit Acceptance neither admitted nor denied any wrongdoing in the settlement.

Credit Acceptance was also accused of making high-interest subprime loans to borrowers it knew or should have known would not be able to repay and violating the state’s usury cap of 21%. The lender was also accused of making 1.5 million calls that violated state law. Those 1.5 million calls that are alleged to have violated state law occurred during a four-year period between 2014 and 2018, according to the complaint. About 90% of the time, Credit Acceptance was alleged to have called individuals at least twice a day. The lender was alleged to have made at least five calls per day to 28% of individuals with debts owed to the company, according to the complaint.

Along with the financial penalty, the company agreed to follow state law when making collection calls.

Interestingly enough, a month before it was sued by the AG, Credit Acceptance Corp. filed a lawsuit of its own, against the AG, challenging the constitutionality of that law. That suit was dismissed this past June.

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