The Auto Lender Credit Acceptance Corporation Will Pay $27 Million in the Largest Settlement of Its Kind
In the largest settlement of its kind, national subprime auto lender Credit Acceptance Corporation (CAC) will pay more than $27 million to settle a lawsuit brought by Massachusetts Attorney General Maura Healey over a variety of alleged unfair practices relating to the company’s role in the origination, collection, and securitization of subprime auto loans.
The settlement, which was filed today in Suffolk Superior Court, requires CAC to pay a total of $27.2 million, and provide debt relief and credit repair to thousands of Massachusetts borrowers. Over 3,000 borrowers across the state are expected to be eligible for settlement funds, including many residents of marginalized communities in Springfield, Boston, Worcester, and Brockton. The settlement also requires CAC to make changes to its loan handling practices.
“Thousands of Massachusetts consumers, many of them first-time car buyers, put their faith in CAC to help them with an auto loan, but were instead lured into high-cost loans, fell deeper in debt, and even lost their vehicles,” said AG Healey. “With this significant $27 million settlement, eligible Massachusetts drivers who have been suffering under the weight of a crushing car loan due to CAC’s deceptive practices will be able to receive relief and avoid new defaults. Predatory car loans, like predatory student loans or mortgages, hurt families and communities. Through our ongoing, extensive investigation into the subprime auto industry, we have a proven record of taking action and getting results for our residents who have been exploited by unscrupulous lenders.”
