Consumer complaint received 2024-01-05
Company: CREDIT ACCEPTANCE CORPORATION
State: AZ
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Managing the loan or lease
Sub-issue: Problem with fees charged

Complaint:
On XX/XX/XXXX I purchased a XXXX XXXX XXXX by putting down {$2000.00} with a loan amount of XXXX with 48 payments on XXXX starting on XXXX,, XXXX. On my first payment a charged over {$3.00} was added, when I asked was told it internet fees, I requested to be refunded since it was not on the disclosure agreement. During the course of the loan I had a hardship due to illness with lupus. I had contacted the lender and explained my situation, I had offer the lender a possession of the vehicle.I was promised that once I will be able to pay again all the late fees will be remove on the account. Two weeks ago I requested the fees removal so I can bring the account current the lender refused, when logging to my account cant see my statement, I requested so I can see the account history was told they dont provide that. I had paid alot money since two years, but the loan still show a remaining balances of XXXX. When I started reviewing the company I find out they have been involved in bad tactics to fraud customers. Why this company still in business? 
misrepresenting the cost of credit and tricking its customers into high-cost loans on used cars. The car-buying experience turns into a nightmare for many of Credit Acceptances borrowers, who face unaffordable monthly payments, vehicle repossessions, and debt collection lawsuits. The joint complaint alleges that, among other things, Credit Acceptance hides costs in loan agreements and sets consumers up to fail. The complaint also alleges that Credit Acceptance violated usury limits and other consumer and investor protection laws. The lawsuit seeks to force Credit Acceptance to stop its illegal practices, reimburse harmed consumers, pay back wrongfully earned gains, and pay a penalty. 

Credit Acceptance obscured the true cost of its loans to car buyers, leading to severe financial distress for borrowers and subjecting them to aggressive debt collection tactics on loans its own systems predicted that borrowers cant afford to repay, said CFPB XXXX XXXX XXXXXXXX. The CFPB and the New York Attorney General seek to halt Credit Acceptance 's illegal practices and make consumers whole. 

XXXX claimed to help low-income New Yorkers purchase cars, but instead, drove them straight into debt, said New York Attorney General XXXX XXXX XXXX XXXX steered hardworking New Yorkers onto a path of financial ruin by tricking them into unaffordable, high-interest auto loans while cutting backroom deals with dealers to increase their own profits. These predatory actions hurt innocent people and left them with mountains of debt. I thank the CFPB for their partnership to stop this harm and protect everyday New Yorkers. 

Credit Acceptance ( XXXX XXXX XXXX ) is an indirect auto lender headquartered in XXXX, Michigan that funds and services used-car loans for people with low credit scores. Credit Acceptance is one of the countrys largest publicly traded auto lenders and does business with a network of more than XXXX affiliated used-car dealers. From XX/XX/XXXX to XX/XX/XXXX, approximately XXXX XXXX people obtained used car loans through Credit Acceptance and its affiliated dealers. In XXXX alone, consumers obtained more than {$4.00} XXXX in Credit Acceptance-financed loans. The companys loans typically carry very high interest rates. 

Specifically, the company allegedly harmed consumers by : Hiding the true cost of credit : Since XXXX, Credit Acceptances loan agreements nationwide have said that consumers would pay interest at an average 22 % APR. However, the true cost of credit offered is far higher than what borrowers are told. This is because Credit Acceptances business model pushes dealers to manipulate the prices of vehicles sold to Credit Acceptance borrowers, based on borrowers projected performance. This increases the principal balance of the loans. By hiding the true cost of the credit in inflated principal balances, Credit Acceptance evades state interest rate caps and deprives consumers of the ability to make informed decisions, to compare financing options, or to avoid high interest charges. 
Setting up borrowers to fail : Credit Acceptance ensured its own profits by providing loans without regard to whether borrowers could afford them. For almost 4 out of 10 loans, Credit Acceptance predicted that it would not be able to collect the full amount financed by the loan. Credit Acceptance profits even when borrowers are unable to pay their loans in full by using aggressive debt collection methods. As a result of Credit Acceptances practices, customers faced late fees, repossessions, auctions, post-repossession collection efforts, lawsuits, and ruined credit profiles. 
Closing its eyes to practices that harmed consumers : The company created financial incentives for dealers to add extra products to loans and then shrugged off whether customers were misled into thinking the add-on products were required. Add-on products, such as vehicle service contracts, are a profit center for Credit Acceptance. They represented about {$250.00} XXXX in revenue in XXXX alone. 
When borrowers default on loans, it can lead to severe consequences, including wage garnishment and an inability to borrow money in the future. A default on an auto loan can also lead to the borrower losing their means of transportation, which can cause job loss and a further spiral of damaged credit and financial distress. 

This is not the only action targeting Credit Acceptance for violation of consumer financial protection laws. For example, last year, the Massachusetts Attorney General secured more than {$27.00} XXXX for thousands of families harmed by Credit Acceptance. 
They still engage on those tactics

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with monetary relief