Consumer complaint received 2024-09-06
Product: Vehicle loan or lease — Loan
Issue: Repossession — Deficiency balance after repossession
Company: CREDIT ACCEPTANCE CORPORATION (MD)

Rebuttal Letter XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX, MD XXXX XX/XX/XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Michigan XXXX RE : CFPB Complaint No. XXXX Credit Acceptance Account No. XXXX Dear Credit Acceptance Compliance Department, I am writing in response to your letter dated XX/XX/XXXX, regarding the dispute over my contract for the purchase of a XXXX XXXX XXXX. While I appreciate your acknowledgment of my concerns, I strongly disagree with your conclusion that Credit Acceptance was not involved in or aware of the fraudulent price increase made by XXXX XXXX XXXX. This issue has been clearly outlined and supported by evidence that has been submitted to your company. 
To reiterate, I previously provided Credit Acceptance with a voice recording of communication with XXXX XXXX XXXX, in which the dealer acknowledges that the price of the vehicle should have been lower than what was reflected in the final contract. This evidence demonstrates that the dealer engaged in fraudulent concealment by altering the contract 's price, and that Credit Acceptance is now enforcing a contract based on fraudulent terms. 
Furthermore, XXXX XXXX XXXX committed fraudulent inducement, which is a form of fraud where XXXXne party is misled into entering a contract based on false representations. Fraudulent inducement renders a contract voidable because the victim was deceived about a material fact prior to entering the agreement. This violation falls under contract law principles, including Restatement ( Second ) of Contracts 164, which deals with misrepresentation that induces a party 's assent to a contract. XXXX XXXX XXXX 's actionsknowingly altering the price and concealing this factmisled me into entering the contract under false pretenses, making the entire agreement invalid. 
This fraudulent inducement also violates the Uniform Commercial Code ( UCC ) Article XXXX, which governs the sale of goods and requires fair dealing and good faith in commercial transactions. The dealers false representations about the vehicle price not only breached this legal duty but also led to a fraudulent agreement being enforced by Credit Acceptance.

In addition, Credit Acceptance, as the financer and assignee of the contract, has a fiduciary duty to act in good faith and in the best interest of its customers. This duty arises under both common law principles and the Restatement ( Second ) of Trusts 2, which imposes a fiduciary duty on parties in positions of trust, such as financial institutions that assume control over a customers assets or contractual obligations. Credit Acceptance has breached this fiduciary duty by refusing to investigate the fraudulent conduct of Arya Auto LLC and by enforcing a contract tainted by fraud. As a fiduciary, Credit Acceptance is obligated to ensure that the terms of the contract are lawful, fair, and in the best interest of both parties, which it failed to do in this case.

This fraudulent concealment and inducement, as well as the breach of fiduciary duty, constitute a clear breach of contract. A contract is an agreement between parties, and it requires good faith and honesty in its execution. By failing to disclose the true price of the vehicle and altering the contract terms without my knowledge or consent, XXXX XXXX XXXX violated this fundamental principle. Credit Acceptance, by enforcing this fraudulent contract, is also perpetuating this breach. Enforcing a contract based on fraudulent terms undermines the integrity of the agreement and invalidates the legitimacy of the contract itself.

These actions fall under several statutes and regulations : 1. 
Breach of Contract and Fraudulent Concealment and Inducement : XXXX XXXX XXXX 's actions violate basic contract law principles, including the doctrine of fraudulent concealment and fraudulent inducement under contract law, which involves intentionally hiding or misrepresenting material facts to deceive another party. This also constitutes a breach of the Uniform Commercial Code ( UCC ) Article XXXX, governing the sale of goods and the requirement for good faith in contractual transactions. 
XXXX. 
Fiduciary Duty : Credit Acceptance has a fiduciary duty under common law principles and the Restatement ( Second ) of Trusts 2, which requires financial institutions and other parties in fiduciary positions to act in good faith and in the best interest of their clients. By failing to address the fraudulent actions of XXXX XXXX XXXX and enforcing a contract based on those fraudulent terms, Credit Acceptance has breached this fiduciary duty. 
XXXX. 
Unfair and Deceptive Practices : The dealer 's conduct and Credit Acceptance 's failure to investigate fall under Section 5 of the Federal Trade Commission Act ( 15 U.S.C. 45 ), which prohibits " unfair or deceptive acts or practices in or affecting commerce. '' The dealers fraudulent concealment and inducement, and the finance company 's refusal to address it, constitute unfair and deceptive practices. 
XXXX. 
Truth in Lending Act ( TILA ) Violations : The failure to accurately disclose the true price of the vehicle and finance terms may be a violation of the Truth in Lending Act ( 15 U.S.C. 1601 et seq. ), which requires clear and accurate disclosure of all credit terms in consumer credit transactions.

5.

Fair Credit Reporting Act ( FCRA ) : Credit Acceptance 's refusal to correct the erroneous reporting on my credit history may be a violation of the Fair Credit Reporting Act ( 15 U.S.C. 1681 et seq. ), which mandates that companies furnish accurate information to credit reporting agencies. Under 15 U.S.C. 1681s-2, a company is required to investigate and correct inaccurate information on a consumers credit report.

6.

Uniform Deceptive Trade Practices Act ( UDTPA ) : The actions of XXXX XXXX XXXX and Credit Acceptance could also be a violation of the Uniform Deceptive Trade Practices Act, which prohibits deceptive practices in trade or commerce, including fraudulent representations in connection with the sale of goods.

7.

State Consumer Protection Laws : Depending on Maryland 's specific consumer protection laws ( such as the Maryland Consumer Protection Act, Md. Code, Commercial Law 13-301 et seq. ), XXXX XXXX XXXX XXXX  fraudulent concealment and inducement, as well as Credit Acceptances failure to address this, may also violate state-level statutes that protect consumers from unfair, abusive, or deceptive practices in transactions involving the sale of goods.

Additionally, I would like to address your claim that requisite statutory notices related to the repossession and sale of the vehicle were sent to me. I never received any delinquency notices or the Notice of Our Plan to Sell Property, which you claim were sent in XXXX XXXX XXXX XXXX It was not until now that I became aware of these notices. As required by law, Credit Acceptance must provide proof that these notices were properly sent and received. Until such proof is provided, I can not accept your assertion that my account was properly serviced. Failure to provide these notices in a timely and proper manner may also violate state and federal repossession laws, including the Uniform Commercial Code ( UCC ) Article 9 and related Repossession and Deficiency Judgment laws.

While I acknowledge the {$6900.00} credit you have applied to my account, this does not absolve Credit Acceptance of its responsibility to address the fraudulent concealment and inducement by XXXX XXXX XXXX  or the impact this has had on my finances and credit report.

Furthermore, your refusal to adjust my credit reporting despite the fraudulent nature of the contract continues to harm me financially.

Given the evidence provided and the ongoing negative impact this has had on my credit and financial standing, I request that Credit Acceptance : 1.

Conduct a thorough investigation into the fraudulent price increase by XXXX XXXX XXXX including a review of the evidence I have submitted.

2.

Adjust my credit reporting to reflect the fraudulent nature of the contract and remove any negative marks related to this account.

3.

Provide proof that the delinquency notices and statutory notices regarding repossession were sent in compliance with the law.

4.

Work with me to resolve the remaining balance on the account in a manner that is fair and reflective of the corrected vehicle price.

I hope Credit Acceptance will take these steps to rectify the situation and ensure that no further harm is done to my financial standing. 
Thank you for your prompt attention to this matter. I look forward to your response. 
Sincerely, XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX, MD XXXX