Consumer complaint received 2024-11-12 00:00:00
Product: Vehicle loan or lease — Loan
Issue: Repossession — Account reinstatement or redemption after repossession
Company: ALLY FINANCIAL INC.
State: TX

Complaint narrative:
To : Consumer Financial Protection Bureau ( CFPB ) XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXXXXXX XXXX XXXXXXXX Subject : Formal Complaint Against Ally Financial Inc. for Fraudulent Loan Practices, Unlawful Repossession, and Demand for Contract Rescission Due to Fraud Complaint Overview I am filing this complaint against Ally Financial Inc. for the unlawful repossession of my vehicle under a claim of loan default. I contend that Ally Financial engaged in deceptive and fraudulent practices that invalidate the loan agreement and justify my right to rescind the contract. Additionally, I assert that the loan was effectively paid at the inception of the agreement through the promissory note, meaning Ally Financials demand for further payments and subsequent repossession is unlawful and constitutes double-dipping.

I request immediate intervention by the CFPB to enforce the return of my vehicle, demand verification of Ally Financials lending practices, and initiate an investigation into these deceptive practices. Legal Basis for Complaint Failure to Disclose Under the Truth in Lending Act ( 15 U.S.C.
XXXX ) Deceptive Non-Disclosure of Loan Funding : Under TILA, Ally Financial is required to fully disclose the terms of credit, including the source and nature of the funds loaned. It has come to my attention that Ally Financial did not provide actual funds for my loan but instead created credit from my promissory note. This constitutes a deceptive omission, as Ally Financial misrepresented the nature of the loan and failed to inform me that no tangible money was actually advanced. 
Violation of Transparency Obligations : By failing to disclose that no real funds were loaned, Ally Financial violated the Truth in Lending Act. This lack of transparency deprived me of informed consent in the transaction and grounds my right to rescind the contract based on fraudulent practices. 
Unjust Enrichment and Violation of Uniform Commercial Code ( UCC ) Double-Dipping through Monetization of the Promissory Note : Under UCC Article 3 , promissory notes can be treated as assets. Ally Financial accepted my promissory note and created credit from it, effectively fulfilling the loan at inception. However, they then demanded further payments, which amounts to double-dipping and unjust enrichment. Ally Financials actions suggest that it monetized my note and subsequently demanded payments as if the loan had not been satisfied, which is inherently fraudulent. 
Bad Faith Conduct under UCC Section 1-304 : The Uniform Commercial Code requires all parties to act in good faith. Ally Financials monetization of my promissory note, followed by repossession, demonstrates bad faith, as it benefits unjustly at my expense while concealing material facts regarding the loan structure. 
Right to Rescind the Contract Due to Fraud and Misrepresentation Fraudulent Inducement and Voidability of Contract : Ally Financial induced me into this contract under false pretenses by failing to disclose that no actual funds were loaned. Under UCC Section 2-721, contracts entered into based on fraud are voidable. Since Ally Financial did not fulfill its obligations as expected by law, I am exercising my right to rescind the contract in full and demand the immediate return of my vehicle. 
Lack of Consideration : For a contract to be enforceable, both parties must provide consideration. In this case, Ally Financial provided no real consideration if it only created credit from my own note. By law, this absence of actual loaned funds voids the contract, making any repossession activities based on this agreement illegal and groundless. 
Unlawful Repossession and Demand for Immediate Return of Property Lack of Standing to Repossess : Since Ally Financial has not provided proof that it loaned tangible funds, it has no lawful standing to enforce a debt collection or repossession. XXXX XXXX XXXX XXXX XXXX for XXXX XXXX XXXX, XXXX XXXX XXXX ( XXXX  ), standing requires a party to demonstrate a concrete and legitimate claim. Ally Financials failure to prove that actual funds were advanced eliminates any basis for repossession.

Conversion and Wrongful Possession : By seizing my vehicle without valid grounds, Ally Financial has committed conversion. I therefore demand the immediate return of my vehicle, as Ally Financial has no legitimate claim to retain possession. 
Relief Sought Given the facts and legal arguments presented, I am seeking the following relief : Immediate Rescission of the Loan Agreement and Return of Vehicle I am exercising my right to rescind the loan agreement in full based on fraud and lack of consideration. I demand that Ally Financial immediately return my vehicle and cease all collection activities related to this loan. 
Burden of Proof on Ally Financial to Demonstrate Loaned Funds I request that Ally Financial be required to produce verifiable evidence that actual funds were advanced in this transaction. Specifically, Ally Financial must prove that real, tangible assets were loaned rather than credit being generated solely from my promissory note. 
Investigation into Ally Financials Lending and Repossession Practices I urge the CFPB to conduct a thorough investigation into Ally Financials practices regarding the monetization of promissory notes and the subsequent double-dipping through unjust collections. This investigation should focus on whether Ally Financials lending practices are misleading to consumers and in violation of federal law. 
Sanctions and Penalties Given the pattern of deceptive practices and alleged fraud in this case, I request that the CFPB consider sanctions and penalties against Ally Financial to deter similar behavior in future transactions. 
Supporting Documentation I am not providing documentation at this time, as I assert that the burden of proof lies with Ally Financial. I expect that they will produce evidence to support their claim, demonstrating beyond question that actual funds were loaned. Should Ally Financial be unable to fulfill this obligation, it will substantiate my claim that the repossession was unlawful and the contract is void.

Conclusion Ally Financials repossession of my vehicle is based on a fraudulent claim and a failure to disclose material information, specifically the lack of actual loaned funds. I am exercising my right to rescind this contract and demand the immediate return of my vehicle. The CFPBs prompt intervention is necessary to ensure compliance with federal law and to prevent Ally Financial from engaging in similar actions against other consumers. 

Thank you for your attention to this matter. I trust that the CFPB will take the necessary steps to investigate and rectify these violations. 

Sincerely, XXXX XXXX

Company response to consumer: Closed with explanation