Consumer complaint received 2018-06-09
Company: CREDIT ACCEPTANCE CORPORATION
State: PA
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Managing the loan or lease
Sub-issue: Problem with the interest rate

Complaint:
Credit Acceptance does NOT have a CDCA license in Pennsylvania and therefore legally can not charge 21 % daily simple interest rate in PA. ( attached ) In brief, Pennsylvania law states .... Consumer Discount Company Act : 7 Pa. Stat. Ann. 6203 A lender who wishes to make loans in amounts less than {$25000.00} with interest rates greater than 6 % must be licensed under the CDCA. A licensed lender may make loans that are greater than the rate specified in the maximum interest rate law. ( 7 Pa. Stat. Ann. 6203. ). in the state of Pennsylvania.

Pennsylvania has two usury statutes that govern the maximum interest rates that lenders may charge in the state : 1. The Loan Interest and Protection Law ( maximum interest rate law ) ( 41 Pa. Stat. Ann. 201 ).

2. The Pennsylvania Corrupt Organizations Act ( 18 Pa. Cons. Stat. 911 ( h ) ( 1 ) ( iv ) ). In addition, the Consumer Discount Company Act ( CDCA ) requires individuals who wish to make loans of {$25000.00} or less at interest rates higher than 6 % to obtain a license ( 7 Pa. Stat. Ann. 6203 ).

The Pennsylvania Attorney General ( PA AG ) enforces the maximum interest rate statute and the Pennsylvania Corrupt Organizations Statute ( 41 Pa. Stat. Ann. 506 ; 18 Pa. Cons. Stat. 911 ( e ) ). The Pennsylvania Department of Banking and Securities enforces the maximum interest rate statute and the CDCA ( 41 Pa. Stat. Ann. 506 ; 7 Pa. Stat. Ann. 6212 ).

Maximum Interest Rate Law : 41 Pa. Stat. Ann. 201 Lenders can not charge an annual interest rate greater than 6 % on consumer loans that are : 1. {$50000.00} or less, for secured and collateralized loans.

2. {$35000.00} or less for unsecured and non-collateralized loans. ( 41 Pa. Stat. Ann. 201. ) The 6 % usury rate does not apply to : Business loans ( 41 Pa. Stat. Ann. 201 ( b ) ). Residential mortgage loans ( 41 Pa. Stat. Ann. 301 ).

A lender that violates this law : o May be required to pay a {$10000.00} fine for each offense ( 41 Pa. Stat. Ann. 505 ( b ) ).

o May face a civil action from the borrower and be required to pay the borrower : three times the amount of the excess interest and charges ( 41 Pa. Stat. Ann. 502 ) ; and attorneys ' fees ( 41 Pa. Stat. Ann. 503. ) o Knowingly and intentionally may face third degree misdemeanor charges ( 41 Pa. Stat. Ann. 505 ( a ) ).

Pennsylvania Corrupt Organizations Law : 18 Pa. Cons. Stat. 911 ( h ) ( 1 ) ( iv ) A lender can not charge an annual interest rate of 25 % or more on a loan. A person who violates that provision is considered to have engaged in racketeering activity and may face first degree felony charges. ( 18 Pa. Cons. Stat. 911 ( c ), ( h ) ( 1 ) ( v ). ) I have attached what Credit Acceptances " Simple Interest '' methodology. At the end of the loan i will have paid 189 % interest ontop of the principal. Meaning a XXXX  loan I am paying 23K+ which is ghastly for a XX/XX/XXXX XXXX XXXX XXXX. I have asked to refinance, I have asked to pay off early. I was told they are " A second chance loan '' and basically I do not have the same rights as any other civilian who took a " normal '' loan. I feel that Credit Acceptance preys on consumers trying to restore their credit. They state on their website that 52 % of borrowers are a " sublime '' loan group. Hence, they did their research and clearly created a product to lock you in not caring that the vehicles that fall under this program are high mileage and old. The dealer that i bought vehicle thru closed within a week after purchase. Even though he told me my interest was 16.5 %, and after a year I could refinance, and that I could also make extra payments a month to put directly onto principal. This is all denied by Credit Acceptance. I believe the dealer lied to me to make the sale because they knew they were closing and could careless. Granted this is about Credit Acceptance, they are illegally charging high interest rate loans in a deplorable manor. 

My second complainant with Credit Acceptance is harassment to collect payment under the Telephone Consumer Protection Act. If your payment has not reached their office by their due date. The start to call every phone number they have from a little before XXXX XXXX EST up to XXXX EST seven days a week, multiple times a day with a minimum of 3 calls. One it is illegal to call before XXXX and after XXXX and on Sundays. They have collected on interest, fees.

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 explanation