3,000 Massachusetts residents victimized by risky predatory car loans eligible for refund
More than 3,000 borrowers across Massachusetts who fell victim to a predatory auto loan company may be eligible for reimbursement as part of a $27.2 million settlement, Attorney General Maura Healey announced.
“Thousands of Massachusetts consumers, many of them first-time car buyers, trusted CAC to help them with an auto loan, but instead were lured into high-cost loans, got into debt, and even lost their vehicle,” Healey said. during a Zoom press conference on Wednesday with three consumers targeted by the company.
She added, “With this significant $27 million settlement, eligible Massachusetts drivers who have suffered under the weight of a crippling auto loan due to CAC’s deceptive practices will be able to receive relief and avoid further defaults. of payment.”
The Suffolk Superior Court settlement with national subprime car lender Credit Acceptance Corporation is the largest such settlement, Healey’s office said.
People who bought cars with loans through Credit Acceptance were loaned money at interest rates that met or exceeded the state’s 21% cap, Healey said. The lending company also engaged in illegal collection practices, according to the settlement.
Healey said many consumers affected by these lending practices live in cities like Springfield, Boston, Worcester and Brockton where they used the subprime mortgage crisis that toppled the US economy more than a decade ago. as a “master plan” to “benefit on some of our most vulnerable residents.
“These were loans that these customers couldn’t afford to repay, but they made them anyway,” she said.
As part of the settlement, thousands of borrowers who received auto loans through Acceptable Credit could be eligible for refunds or debt relief. The lender 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 an hour from home. At an interest rate of 20.99%, Mello said he fell behind quickly and endured constant collection calls at all hours of the day and night as well as frequent repossessions. of vehicles until he lost the car for good in 2019.
“It hurt me for a long time and I’m trying to get over it,” Mello said.