Healy’s office will contact more than 3,000 eligible borrowers. Any borrowers with questions about eligibility should call Healy’s office at 617-963-2240.
Credit Acceptance positions itself as the ideal destination for consumers with low credit ratings who need to pay for a car purchase. The company works with over 12,000 dealers nationwide and has funded over 300,000 loans in 2020. according to recent investor documentation…
In 2020, Healy’s office sued a lender, claiming that since 2013 it had issued thousands of consumer loans that it “knew or should have known” it could not pay them back. Credit Acceptance also allegedly assessed hidden finance charges that made loans usurious under Massachusetts law that prohibits charging an annual percentage rate (APR) above 21 percent.
According to the lawsuit, Credit Acceptance knew that based on its own data on the return of rights and loans of the company, “more than 50 percent of borrowers with high risk and low rates default, usually for a period of a little more than a year.”
In accordance with the settlement agreement, Credit Acceptance did not acknowledge its responsibility. The company did not immediately respond to a request for comment, but a public statement released Wednesday afternoon said it was “happy” to leave the case behind.
“The company looks forward to continuing to serve customers in the Commonwealth of Massachusetts through its funding programs,” it said in a statement.
The Massachusetts case is probably just the tip of the iceberg, says Chuck Bell, director of programs for Consumer Reports. “CR urges other states to ensure that auto lenders are closely monitored to ensure they comply with government interest rate limits and lending laws and do not invest hidden finance charges or fees in loans,” he says.