Consumer complaint received 2024-07-06
Product: Credit reporting or other personal consumer reports — Credit reporting
Issue: Problem with a company's investigation into an existing problem — Their investigation did not fix an error on your report
Company: CREDIT ACCEPTANCE CORPORATION (IL)

Dear CFPB, I hope this letter finds you well. I am writing to request your assistance in resolving an issue with my payment and a 30-day late payment on my account with Credit Acceptance . Despite my efforts to resolve this matter directly with Credit Acceptance and through goodwill letters to all three credit bureaus ( XXXX, XXXX, and XXXX ), Credit Acceptance has refused to rectify this situation. Please see attached files, previously filed conplaint also included. 

**Background** : Before my departure to XXXXXXXX XXXX XXXX XXXX on XX/XX/2024, I communicated with a representative from Credit Acceptance regarding my upcoming military service and the potential difficulty I would have in making timely payments due to limited access to phone and banking services. The representative suggested setting up a payment arrangement of {$50.00} per month to help manage my payments during this period. 

Despite this arrangement, Credit Acceptance reported a late payment on my credit report for XXXX which has adversely affected my credit score and financial well-being. As a service member, I am entitled to protections under the Servicemembers Civil Relief Act ( SCRA ), which should have prevented this negative reporting. 

**Violations of Rights** : 1. **Servicemembers Civil Relief Act ( SCRA ) ( XXXX XXXX. XXXX ) ** : - The SCRA is designed to provide financial and legal protections to XXXX XXXX servicemembers, including protections against negative credit reporting for obligations entered into before XXXXXXXX XXXX. Credit Acceptance 's failure to honor the agreed payment arrangement and report the payment as " on time '' constitutes a violation of the SCRA, specifically under Section 3937, which provides for the reduction of interest rates and other relief on obligations incurred prior to military service. By reporting a late payment despite an agreed-upon arrangement, Credit Acceptance is not providing the protections mandated under the SCRA. 

2. **Fair Credit Reporting Act ( FCRA ) ( 15 U.S.C. 1681 et seq. ) ** : - The FCRA requires that information reported to credit bureaus be accurate. Given the agreement with Credit Acceptance 's representative, the reported late payment is inaccurate and misleading. This misreporting is a clear violation of the FCRA, particularly Section 1681s-2, which mandates the accurate reporting of information by furnishers of credit data. The late payment reporting undermines the accuracy of my credit report and fails to reflect the agreed payment arrangement. 

XXXX. **Truth in Lending Act ( TILA ) ( 15 U.S.C. 1601-1667f ) ** : - TILA requires clear and accurate disclosure of the terms and conditions of credit agreements. The representative 's failure to provide accurate information regarding the impact of the payment arrangement on my credit report is a violation of XXXX, which aims to ensure consumers are fully informed about the terms of their credit arrangements. 

XXXX. **Fair Debt Collection Practices Act ( FDCPA ) ( 15 U.S.C. 1692-1692p ) ** : - The FDCPA prohibits deceptive and unfair practices in debt collection. By failing to honor the agreed-upon payment arrangement and reporting a late payment, Credit Acceptance engaged in practices that are misleading and unfair, thus violating the FDCPA.

5. **Equal Credit Opportunity Act ( ECOA ) ( 15 U.S.C. 1691-1691f ) ** : - The ECOA prohibits discrimination in credit transactions. While this primarily addresses issues of credit discrimination, the act also ensures fair treatment in credit practices. The failure to honor the payment arrangement and the resultant negative impact on my credit score can be construed as a violation of the ECOA 's principles of fair treatment.

6. **Consumer Financial Protection Act ( CFPA ) ( 12 U.S.C . 5481-5603 ) ** : - The CFPA established the CFPB and grants it the authority to prevent unfair, deceptive, or abusive acts or practices in the financial industry. Credit Acceptance 's actions could be considered unfair and deceptive, falling under the purview of the CFPA.

7. **Military Lending Act ( MLA ) ( 10 U.S.C . 987 ) ** : - The MLA provides additional protections to servicemembers in financial transactions, including capping interest rates and prohibiting certain lending practices. While primarily addressing predatory lending, the MLA reinforces the need for fair treatment of servicemembers in all financial dealings. Credit Acceptances actions could be seen as contrary to the intent of the MLA, which aims to provide comprehensive financial protections for servicemembers.

**Rebuttal to Credit Acceptance 's Statement** : Credit Acceptance has stateXXXX that payment arrangements are offered as a courtesy to assist with past due balances without the risk of repossession but do not alter the terms of the contract. This stance fails to recognize several critical points : 1. **Implications of Payment Arrangements** : - The payment arrangement was intended to address the unique challenges of military service, which the SCRA explicitly aims to mitigate. The representative suggested the {$50.00} payment arrangement to manage my payments during my service period, implicitly acknowledging the need for special considerations due to my active duty status.

2. **Contractual Terms and SCRA Compliance** : - The SCRA requires creditors to provide certain accommodations to servicemembers. While the payment arrangement may not alter the original contract terms, the SCRA mandates adjustments to protect servicemembers from undue financial hardship. Reporting a late payment despite an agreed arrangement violates these protections and fails to account for the special considerations required by the SCRA.

3. **Promissory Estoppel** : - Under the doctrine of promissory estoppel, a promise made that the promisor should reasonably expect to induce action or forbearance on the part of the promisee, and which does induce such action or forbearance, is binding if injustice can be avoided only by enforcement of the promise. The representative 's suggestion constituted such a promise, and I relied on it to my detriment.

**Demands** : 1. **Immediate Rectification** : - I demand that Credit Acceptance update my credit report to reflect the payments as " ON TIME PAID AS AGREED. '' 2. **Review of Call Records** : - I request a thorough review of the recorded calls between myself and Credit Acceptance representatives to verify the details of the payment arrangement and its intended impact on my payments during active duty.

3. **Compliance with SCRA and Other Applicable Laws** : - I urge Credit Acceptance to comply with the protections afforded to servicemembers under the SCRA, FCRA, TILA, FDCPA, ECOA, CFPA, and MLA.

**Consequences of Non-Compliance** : If Credit Acceptance does not rectify this matter immediately, after 14 days I will take the following actions : - File a formal complaint with the Judge Advocate General 's Corps ( JAG ) to seek legal remedies for this violation of my SCRA rights.

- Submit a detailed complaint to the Consumer Financial Protection Bureau ( CFPB ) to investigate Credit Acceptance 's practices.

- Explore all available legal options to ensure that my rights are protected and that Credit Acceptance is held accountable for its actions.

Credit Acceptances disregard for the protections afforded to servicemembers is unacceptable. I expect a prompt and favorable resolution to this matter. Failure to do so will result in immediate legal action.

Sincerely, XXXX XXXX