Consumer complaint received 2024-10-30
Product: Vehicle loan or lease — Loan
Issue: Repossession — Damage caused or loss of personal items in vehicle during the actual repossession
Company: GFS II, LLC (MI)

Complainant : XXXX XXXX XXXX, a belligerent private sector

; Michigan State National, exercising his rights as an account holder and consumer under federal consumer protection and financial laws. Respondent : Gateway Financial Solutions XXXX, headquartered in Michigan, accountable under federal statutes governing consumer finance, bankruptcy proceedings, and identity use protections. Basis for Complaint Federal Jurisdiction and Governing Statutes : Bankruptcy Law : Under Title 11, U.S. Code, governing the handling and disposition of assets post-bankruptcy. Securities Exchange Act of 1934 ( 15 U.S.C. 78j ( b ) ) : Relating to allegations of potential securities fraud. Identity Theft and Assumption Deterrence Act ( 18 U.S.C. 1028 ) : Addressing misuse of Social Security information. Foreign Agents Registration Act ( 22 U.S.C. 611 et seq. ) : For verifying compliance with federal agency registration. Commerce Clause ( U.S. Constitution, Article I, Section 8 ) : Given the interstate nature of transactions between the parties. Claims and Relief Requested Forensic Audit : Requesting an exhaustive forensic audit covering all transactions between Complainant and Gateway Financial Solutions XXXX, including potential insurance claims, securities transactions, and any misuse of Social Security details. Insurance Inquiry : Disclosure of all insurance claims or any other compensations or bonds claimed by
Gateway Financial Solutions on the Complainants account or transactions.

Fee Compliance : Confirmation of adherence to Complainants stated fee schedule for use of sensitive information including Social Security number and contractual data. 1099-C Inquiry : Clarification as to why
Gateway did not initiate a 1099-C Cancellation of Debt after repossession following XXXX  XXXX Bankruptcy discharge.

Transparency Requirement : Demand for detailed disclosure on double-dipping practices or unclaimed funds retained from any endorsed or liquidated securities of the Complainant.

Federal Agency Involvement and Reporting Federal Investigations : Has Gateway Financial Solutions XXXX been subject to any investigations or audits by federal agencies such as the FBI, SEC, or IRS

concerning the Petitioner 's account? Provide all reports, findings, and related documentation. SEC Reporting : Has Gateway Financial Solutions XXXX filed any reports with the SEC regarding the Petitioner 's securities? If so, please provide copies of these reports and any correspondence with the SEC.

IRS and Debt Reporting : What records does Gateway Financial Solutions XXXX have in relation to any IRS reporting on canceled or discharged debt concerning the Petitioner 's account? Include any IRS correspondence and documentation of compliance with 26 U.S.C. 6050P, if applicable. Additional Compliance and Accountability Federal Trade Commission ( FTC ) Compliance : How does
Gateway Financial Solutions XXXX ensure compliance with the Federal Trade Commission Act and other consumer protection laws in its engagements with the Petitioner? Provide copies of internal compliance policies and any relevant FTC correspondence if any.

Fair Credit Reporting Act ( FCRA ) Compliance : Has Gateway Financial Solutions XXXX adhered to FCRA standards in reporting the Petitioner 's XXXX  XXXX Bankruptcy and other credit-related information? Provide evidence of this compliance, including credit reporting records and related correspondence.

Enforcement of Judgments : If a penalty judgment is issued against Gateway Financial Solutions XXXX, does the corporation have assets within the jurisdiction to satisfy this judgment? Provide information on any state or federal assets held within Michigan or another jurisdiction.

Notice of Default for Non-Response Please be advised that any failure to provide complete and specific answers to these questions will be taken as a presumption of non-compliance and evidence of intent to impede Petitioner 's lawful audit and investigative demands. Failure to respond fully and transparently will be considered as an acceptance of default, reinforcing Petitioner 's claims and providing grounds for further legal action and imposition of penalties, as well as the involvement of federal enforcement agencies. 
XXXX, XXXX XXXX XXXX, respectfully reserves the right to invoke all relevant federal and state laws to enforce compliance, initiate a full forensic audit, and seek any additional relief deemed legally appropriate. Under the Fair Credit Reporting Act ( FCRA ), consumer reporting agencies and creditors must ensure the accuracy, fairness, and privacy of information in credit reports. The Complainant asserts his right to a review of
Gateway Financial Solutions XXXX compliance with FCRA standards, specifically regarding : XXXX  XXXX Bankruptcy Reporting : Has Gateway Financial Solutions accurately reported the Complainant 's XXXX  XXXX bankruptcy, and if so,

was this done in a manner compliant with FCRA standards for accuracy and fairness? Under FCRA, once a debt is discharged in bankruptcy, the account status should reflect a {$0.00} balance and be listed as discharged rather than as an outstanding debt. If Gateway reported otherwise, this could constitute a violation of FCRA guidelines. Right to Remove Negative Reports Post-Bankruptcy Discharge : The Complainant requests removal of any derogatory or negative reports associated with this account now that the debt has been discharged. FCRA allows consumers to dispute any information they believe to be inaccurate, misleading, or unverifiable, particularly following a bankruptcy discharge. Complainant requests evidence from Gateway of its adherence to FCRA standards in reporting this information. Failing to update or correct this information after the bankruptcy discharge may indicate non-compliance. Account Removal from Credit Report : The Complainant asserts his right to request the removal of this account from his credit report under FCRA. This request is based on the debt being discharged in bankruptcy and the potential inaccuracy or harm of continuing to report it in a manner inconsistent with federal guidelines. If Gateway has included inaccurate information or failed to reflect the bankruptcy discharge, FCRA permits the Complainant to request deletion of the account from the credit report entirely. Provision of Supporting Documentation : Gateway Financial Solutions XXXX is requested to provide

documented evidence of its compliance with FCRA requirements. This includes copies of credit reporting records, correspondence between Gateway and credit reporting agencies, and records of any updates or disputes processed regarding the account in question. Resolution Sought Removal of XXXX XXXX Bankruptcy and Negative Credit Reporting : Request that Gateway cease reporting derogatory information and remove any records of the XXXX  XXXX bankruptcy from credit reporting agencies if inaccuracies are found or if the report fails to reflect the discharge. Permanent Removal of Account from Credit Report : R equest that Gateway remove the account from the Complainants credit report to prevent further negative impact and ensure full compliance with FCRA standards. Provision of Evidence : Request that Gateway submit all relevant credit reporting records and compliance documentation to confirm its adherence to FCRA requirements. Failure to provide this evidence may support a presumption of non-compliance with FCRA standards. The Complainant reserves the right to pursue further actions, including formal disputes with credit reporting agencies and regulatory complaints if compliance is not demonstrated. For Michigan-specific laws governing vehicle loans, finance charges, and insurance coverage, the following state laws and codes may apply in conjunction with federal statutes like 15 U.S. Code 1605. These Michigan codes address credit disclosures, finance charges, and insurance requirements relevant to vehicle financing : Michigan Consumer Protection Act ( MCPA ) : MCL 445.903 : This section outlines unfair, unconscionable, or deceptive methods in trade or commerce, which can include practices related to vehicle loan agreements, add-ons, and financing terms. If a lender or dealership fails to disclose all costs clearly or includes hidden insurance fees without the borrowers knowledge, it may be considered a violation under this act. Michigan Motor Vehicle Sales Finance Act : MCL 492.101 et seq. : This act regulates retail installment contracts for vehicles and governs disclosures and requirements for dealers and lenders in vehicle sales, including the handling of premiums for any required insurance. MCL 492.117 : Specifically, this section requires that the cost of insurance ( if part of the contract ) be fully disclosed in the installment contract. It also mandates that any insurance coverage must be beneficial to the buyer, often as part of the total financing package. Michigan Insurance Code of 1956 : MCL 500.2101 et seq. : Pertains to the regulation of insurance policies and premiums, especially regarding automotive and loan-related insurance products. Lenders and dealers offering credit insurance as part of the vehicle financing must comply with the Michigan Insurance Code, including the necessity for clear, separate disclosure of any premiums or charges and must avoid charging for insurance or warranties that do not directly benefit the borrower. Michigan Consumer Financial Services Act : MCL 487.2057 : This statute requires finance companies to adhere to truth-in-lending principles and transparent disclosure practices, mirroring elements of federal regulations like the Truth in Lending Act ( TILA ). It mandates that finance charges, including any insurance or fees tied to the loan, be explicitly disclosed as part of the agreement. Michigan Uniform Commercial Code ( UCC ) : MCL 440.3101 et seq. : Governs secured transactions, ensuring that security interests in the vehicle are properly disclosed and registered. This includes any liens or obligations tied to the loan and insurance that protect the lenders interest. Application to Insurance and Premium Inclusion The combination of federal and Michigan law requires : Full Disclosure : The dealership and lender must disclose all finance charges, including insurance premiums or other protective coverage added to the loan. Beneficial Coverage : Any insurance included in the premium must benefit the borrower, protecting their interest in the financed vehicle. Restriction Against Double-Dipping : Michigan law supports the prohibition of double-dipping through additional, unapproved charges ; thus, both the dealership and lender can not add fees without clear, documented borrower consent. These statutes support a fair financing structure where all premiums, insurance, and protection costs are transparently included in the finance charge, with no undisclosed or redundant fees. For any breaches or discrepancies, filing a complaint under both federal and state laws would be appropriate. When a vehicle loan is approved, and the finance agreement includes insurance premiums as part of the total finance charge, the debtor may not need to pay separate insurance costs because these are covered within the loan itself. Heres how this works according to the law : Inclusion in the Finance Charge : 15 U.S. Code 1605 defines a " finance charge '' to encompass all costs imposed directly or indirectly by the lender as a condition of extending credit, including insurance premiums that protect the lender against borrower default or loss. Specifically, any insurance or guarantee fees required by the lender to protect the loan must be disclosed and included in the total finance charge, which the borrower pays over time through their loan payments. Prepaid Insurance Coverage : If the lender requires insurance as part of the loan, the cost of that insurance should already be included in the loans monthly payment. In practice, the debtors payments cover both the loan principal and finance charges ( interest and insurance ), making separate monthly insurance payments unnecessary. Under Michigans Motor Vehicle Sales Finance Act ( MCL 492.117 ), the lender must clearly disclose the cost of any insurance included in the loan agreement, allowing the borrower to see that insurance is already factored into the financing. Single Obligation for Loan Repayment : Because the insurance premium is incorporated into the total loan amount, the debtor has a single repayment obligation that covers all elements of the financing package ( principal, interest, insurance ). This simplifies repayment and legally binds the lender to treat all covered items as part of the finance charge, which the borrower pays over time. With the insurance cost built into the loan, the borrower should not face any additional insurance expenses unless they choose to purchase additional, optional insurance coverage. Prohibitions Against Double Charging : Michigan law and consumer protection statutes prevent lenders from charging the borrower twice for insurance that has already been covered. By embedding the insurance premium into the finance charge, the lender acknowledges that all necessary protections for the vehicle and loan are satisfied within the approved financing terms. In essence, by legally mandating insurance inclusion in the premium, the law protects borrowers from being billed separately for insurance, as their monthly loan payments already fulfill that obligation. This arrangement not only simplifies payments but also ensures transparency, as the borrower is fully informed about the included insurance costs when they sign the loan agreement.

Fair Credit Reporting Act ( FCRA ) ( 15 U.S.C. 1681 ) Under the FCRA, creditors must report information accurately and fairly. While the act primarily outlines consumer rights to dispute inaccuracies, a debtor may argue that continued reporting in violation of FCRA standards entitles the debtor to compensation, especially if the reporting breaches the terms of a Security Agreement that mandates truthful and compliant data sharing. Remedy : Damages for negligent or willful noncompliance, including statutory, punitive, and equitable relief. Truth in Lending Act ( TILA ) ( 15 U.S.C. 1601 ) TILA requires transparent disclosure of credit terms and charges, including any security interests, fees, and terms that may impact a consumers rights. A debtors Security Agreement can stipulate an obligation for full disclosure of reporting practices to prevent unjust enrichment by the creditor. Remedy : The debtor may claim damages for violations of disclosure and seek to apply TILA to backdate protection terms per the Security Agreement. Uniform Commercial Code ( UCC ) - Article 9, Secured Transactions The UCC allows a secured party to establish the debtor 's rights through a Security Agreement, which may state terms applying both retroactively and into the future. If the Security Agreement includes clauses requiring certain standards for reporting and information sharing, the debtor may argue that any deviation constitutes a breach. Remedy : The debtor may charge fees, enforce penalties, or claim damages if credit reporting by the creditor violates these terms, as per UCC provisions on secured transactions and contractual obligations. Equity and Unjust Enrichment Doctrine Equity law allows for remedies in cases where one party unfair ly benefits at anothers expense. If a creditors reporting negatively affects the debtors credit and financial standing, the debtor may seek restitution under unjust enrichment. This principle supports the debtors claim to enforce retroactive provisions of the Security Agreement, including equitable relief or charging fees for harm done. Remedy : The debtor may request restitution, fair compensation, or enforce specific performance to correct any negative impacts caused by the creditors reporting. Contract Law - Breach of Implied Covenant of Good Faith and Fair Dealing Most contracts, including those under UCC provisions, are assumed to operate under the principle of good faith and fair dealing. If a creditors reporting impairs the debtors financial standing and violates the terms of the Security Agreement, the debtor may claim breach of this covenant. Remedy : Compensation for any damages or fees stipulated in the Security Agreement and potential court-ordered remedies. Federal Debt Collection Practices Act ( FDCPA ) ( 15 U.S.C. 1692 ) FDCPA restricts certain practices by creditors in collecting debts, including the obligation to prevent any reporting that misrepresents or unfairly characterizes the debtors obligations. A Security Agreement with retroactive effect may further strengthen the debtors claim to charge fees for any collection actions that harm the debtors standing. Remedy : Actual damages, legal fees, and statutory penalties for misleading reporting practices. Promissory Estoppel ( Equity Doctrine ) If the creditors reporting contradicts any terms in the Security Agreement that protect the debtor, the debtor may assert that their reliance on the agreement allows for equitable relief under promissory estoppel. This can apply even if reporting is technically accurate if it conflicts with Security Agreement protections. Remedy : Enforcement of compensation or relief as stipulated in the Security Agreement. Uniform Commercial Code ( UCC ) - Article 1, General Provisions ( UCC 1-103 ) UCC 1-103 incorporates principles of law and equity into the UCC framework, meaning that creditors must honor equitable agreements set forth in a Security Agreement. This includes any right the debtor has to charge fees, demand corrections, or require disclosures. Remedy : Equitable relief for any negative reporting impact and enforcement of fees and penalties as per the Security Agreement. Equitable Estoppel If the Security Agreement states that credit reporting protections apply for the lifetime of the debtor, any conflicting actions by the creditor may be challenged under equitable estoppel, preventing the creditor from taking inconsistent actions. Remedy : Preventative or compensatory relief in alignment with Security Agreement terms, including potential removal of negative information or charging fees. These combined legal principles could support the debtors assertion of rights to fees, penalties, and corrections based on past, present, or future terms outlined in a Security Agreement with the creditor, allowing for retroactive enforcement of such protections and equitable remedies.