Consumer complaint received 2022-07-30
Company: CREDIT ACCEPTANCE CORPORATION
State: VT
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Problems at the end of the loan or lease
Sub-issue: Problem while selling or giving up the vehicle

Complaint:
In XX/XX/XXXX, I finance a XXXX XXXX XXXX through the Credit Acceptance Corporation. By XX/XX/XXXX I had called the Credit Acceptance Corporation to request that they come and take the vehicle because I would no longer be able to make payments due to ongoing XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Credit Acceptance considered the vehicle surrendered and subsequently put the vehicle up for auction where they sold the vehicle for roughly {$1800.00}. In the summer of XXXX I got a letter from Credit Acceptance stating that they were going to report to the credit bureaus that I still owed {$5000.00} on the debt and the XXXX would remain reported to my credit report in default as a collection until it was paid in full or until it was too old to be reported to the credit bureaus. 

Between the years of XXXX and XXXX I contacted the collections department at Credit Acceptance in writing to explain the situation as to why I had to surrender the vehicle like I did and I asked the Credit Acceptance Corporation to take a deeper look into the processing of my loan application and approval for the loan to determine if I was actually eligible when I was initially approved for the loan of the vehicle. I also made a complaint to the FEC to be able to determine whether Credit Acceptance had ethically " vetted '' me for an auto finance loan under federal law and regulation. 

Credit Acceptance responded to two different inquiries regarding the status of my loan in collections by writing. In the letter that Credit Acceptance sent to me in regards to the complaint made by me to the FEC, Credit Acceptance was adamant as of the Year XXXX that the only time that the debt would be considered satisfied is if I paid the {$5000.00} in full or the age of the collection item was too old to continue to be on my credit report and at such time it would end up falling off of my credit report. 

In XXXX I was working with XXXX XXXX on credit repair and it was noticed that the {$5000.00} being reported by Credit Acceptance between the years of XXXX and XXXX had been removed from my credit report. Based on the correspondence from Credit Acceptance itself that I had received in writing, and based on the age of the delinquency of the {$5000.00} that Credit Acceptance alleged I owed them, it was believed that the item fell off my credit report because it had remained on my credit report for 7 years. 

In XX/XX/XXXX, I received a notice from the IRS stating that in XXXX, Credit Acceptance had reported that they had forgiven the {$5000.00} of alleged debt and the IRS is now proposing that I pay taxes on the alleged forgiveness of the {$5000.00} alleged debt that was allegedly forgiven by Credit Acceptance the same year it was due to fall off my credit report because of the age of the collection, XXXX ( 7 years ). I tried to contact Credit Acceptance and ask them about this because I never received a 1099 form or any other information pertaining to any alleged forgiveness of the {$5000.00} in debt. When I asked a collections representative at Credit Acceptance for all written records and correspondences between myself and Credit Acceptance between the years of XXXX and XXXX, I was told that I would have to put that request in writing and send that request via social Service to Credit Acceptance headquarters. 

I believe that Credit Acceptance acted unethically. In their own writing to me Credit Acceptance detailed that the debt would be removed from my credit report only if I paid the alleged XXXX owed in full or until the debt was too old to be on my credit report. It is a shock to get a notice in XXXX that Credit Acceptance reported to the IRS that they forgave {$5000.00} regarding the XXXX XXXX XXXX that was repossessed by Credit Acceptance in XX/XX/XXXX. 

I have launched a XXXX XXXX XXXX complaint against Credit Acceptance for this and I have also contacted my local Vermont Department of Legal Aid. I have also contacted the office of United States Senator XXXX XXXX whose office has taken interest in this issue and the ethics & legality of this matter and the issue of whether a corporation can forgive a debt, even if the debt has already been reported your credit bureaus for 7 years and has exhausted is right to report to the credit bureau as a delinquent debt. 

I ask that the Consumer Protection Bureau look into the matter to see if Credit Acceptance acted in a predatory manner in regards to how they allegedly forgave the debt and reported it to the IRS in XXXX, and whether it was legal for Credit Acceptance to forgive the alleged {$5000.00} that was suppose to fall offy credit reports due to the fact that the alleged that a XXXX was on my credit report for 7 years. Can a corporation have its cake and eat it too? In other words, is it legal and ethical for a corporation like Credit Acceptance to take a very delinquent debt that is supposed to fall off a credit report due to the age of the debt and just before the stroke of midnight or after the stroke of midnight, they " forgive '' the debt right before the debt falls off the credit report of the consumer- and the consumer is left holding the bag after their credit has been ravaged for 7 years by the debt already? 

Thank you for taking the time to look into this matter. I will provide as much documentation as I can if requested. 

Sincerely, XXXX XXXX XXXX

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