Consumer complaint received 2024-11-18
Product: Vehicle loan or lease — Loan
Issue: Managing the loan or lease — Problem with the interest rate
Company: CREDIT ACCEPTANCE CORPORATION (MI)

This complaint alleges that Credit Acceptance Corporation ( XXXX  ) engaged in multiple deceptive, unfair, and abusive practices in violation of the Truth in Lending Act ( TILA ), the Consumer Financial Protection Act ( CFPA ), the Fair Credit Reporting Act ( FCRA ), and other applicable federal and state laws. These violations created significant financial hardship and burden, misrepresented credit benefits, and failed to provide legally required transparency on loan terms. Below are the specific claims. 
Failure to Disclose Total Sale Price and Finance Charges Transparently XXXX failed to comply with 12 C.F.R. 1026.18 by not clearly disclosing the total sale price and finance charges separately, instead embedding these in the principal loan amount. This misleading representation of the true cost of credit violates Truth in Lending Act ( TILA ) requirements, making XXXX civilly liable under 15 U.S.C. 1640. 
Inadequate Disclosure of Add-On Product Costs ( XXXX  Insurance XXXX Extended Warranties ) XXXX failed to comply with 12 C.F.R. 1026.18 ( c ), which requires clear itemization and disclosure of optional add-on products. By embedding these optional costs within the financed amount, XXXX violated XXXX, making it civilly liable under 15 U.S.C. 1640. 
Unfair Loan-to-Value Ratio on XXXX Vehicles XXXX financing exceeded the fair market value of the vehicle, creating an unfair loan-to-value ratio that burdens borrowers. This practice fails to meet fair lending standards and is considered exploitative, violating the Consumer Financial Protection Act ( CFPA ), 12 U.S.C. 5531 ( d ), and making XXXX civilly liable under 15 U.S.C. 1640. 
Misrepresentation of APR Due to Hidden Finance Charges XXXX failed to comply with 12 C.F.R. 1026.18 ( d ), which mandates accurate APR disclosure, by embedding finance charges in the principal and underrepresenting the APR. This violation makes XXXX civilly liable under 15 U.S.C. 1640. 
Deceptive Finance Charges and Principal XXXX XXXX obscured the true finance charges by embedding them within the principal, inflating the loan amount beyond the vehicles fair market value. This violates XXXX, specifically 15 U.S.C. 1638 ( a ) ( 3 ), and creates civil liability for XXXX under 15 U.S.C. 1640.

Failure to Provide Accurate Disclosure of Payment Allocation for Partial Payments XXXX did not comply with 15 U.S.C. 1638 ( a ) ( 8 ), which requires clear disclosures on how partial payments are allocated. This failure makes XXXX civilly liable under 15 U.S.C. 1640. 
False Claims Regarding Credit Improvement Opportunities XXXX falsely claimed that the loan would improve my credit, despite loan terms that made default likely. This deceptive representation violates FCRA, 15 U.S.C. 1681, and the CFPA, 12 U.S.C. 5536 ( a ) ( 1 ) ( B ), making XXXX civilly liable under 15 U.S.C. 1640. 
Unconscionable Contract Terms and Excessive Interest Rates The contract terms included high-interest rates and repossession conditions that are unconscionable and exploit borrowers. This violates UCC 2-302, CFPA 12 U.S.C. 5536 ( a ) ( 1 ) ( B ), and Michigan Compiled Laws 438.31 regarding usury limits, making XXXX civilly liable under 15 U.S.C. 1640. 
Misrepresentation of the Loans Purpose and Terms XXXX  misrepresented the loans purpose by implying it could help with credit repair, which is deceptive. This violates CFPA, 12 U.S.C. 5536 ( a ) ( 1 ) ( B ), and FTC Act, 15 U.S.C. 45 ( a ), rendering XXXX civilly liable. 
Unclear Arbitration Clause and Restricted Legal Recourse The arbitration clause restricted my right to pursue claims in court, violating CFPA, 12 U.S.C. 5536 ( a ) ( 1 ) ( B ), and FAA, 9 U.S.C. 1-16, due to lack of transparency. This makes XXXX civilly liable under 15 U.S.C. 1640. 
Incentivization of Unnecessary Add-On Products XXXX  encouraged unnecessary add-on purchases, such as warranties, without proper disclosure, violating CFPA, 12 U.S.C. 5531 ( a ) and TILA, 15 U.S.C. 1605 ( a ), making XXXX civilly liable under 15 U.S.C. 1640. 
Violation of State Usury Laws by Concealing Excessive Interest By embedding finance charges in the principal, XXXX effective interest rate XXXX exceed state usury caps. This violates New York General Obligations Law 5-501, Michigan Compiled Laws 438.31, and CFPA 12 U.S.C. 5536 ( a ) ( 1 ) ( A ), making XXXX civilly liable.

Failure to Provide Required Privacy Opt-Out Rights XXXX privacy notice does not clearly inform of opt-out rights, violating GLBA, 15 U.S.C. 6802 ( b ) and FCRA, 15 U.S.C. 1681b, making XXXX civilly liable. 
Improper Reporting of XXXX Information tXXXX Credit Bureaus XXXX reported loan information in a manner that misrepresented my creditworthiness, violating FCRA, 15 U.S.C. 1681s-2, and CFPA, 12 U.S.C. 5536 ( a ) ( 1 ) ( B ), making XXXX civilly liable. 
Deceptive Terms Regarding Required Insurance The contract misrepresented requirements for insurance coverage, failing to inform me of my rights to choose my insurer, violating GLBA, 15 U.S.C. 6802, and CFPA, 12 U.S.C. 5536 ( a ) ( 1 ) ( B ).