Consumer complaint received 2024-03-27 00:00:00
Product: Vehicle loan or lease — Loan
Issue: Repossession — Account reinstatement or redemption after repossession
Company: CREDIT ACCEPTANCE CORPORATION
State: VA

Complaint narrative:
The complaint further alleges that XXXX XXXX applies complicated algorithms to predict how much it is likely to collect from borrowers to determine how much to offer dealers for each loan, resulting in high-cost loanswith annual percentage rates ( APR ) often exceeding state usury capsmade without regard for borrowers ability to repay, while still yielding profits for Credit Acceptance. A significant number of Credit Acceptances most credit-constrained borrowers become delinquent on their loans within the first year, and many also lose their cars to repossession and auction or suffer other negative effects from the loans. The joint complaint alleges that Credit Acceptance is engaging in deceptive acts or practices in violation of the Consumer Financial Protection Act of 2010 by misrepresenting key loan terms, including the true principal, finance charge, and APR. The joint complaint further alleges that Credit Acceptance is engaging in abusive acts or practices by taking unreasonable advantage of consumers lack of understanding of the risk of default and the severity of the consequences associated with its loans, and taking unreasonable advantage of consumers inability to protect their interests in selecting or using Credit Acceptances loans. The joint complaint also alleges that Credit Acceptance substantially assists dealers in the deceptive sale of add-on products. The complaint further alleges that Credit Acceptance applies complicated algorithms to predict how much it is likely to collect from borrowers to determine how much to offer dealers for each loan, resulting in high-cost loanswith annual percentage rates ( APR ) often exceeding state usury capsmade without regard for borrowers ability to repay, while still yielding profits for Credit Acceptance. A significant number of Credit Acceptances most credit-constrained borrowers become delinquent on their loans within the first year, and many also lose their cars to repossession and auction or suffer other negative effects from the loans. The joint complaint alleges that Credit Acceptance is engaging in deceptive acts or practices in violation of the Consumer Financial Protection Act of 2010 by misrepresenting key loan terms, including the true principal, finance charge, and APR. The joint complaint further alleges that Credit Acceptance is engaging in abusive acts or practices by taking unreasonable advantage of consumers lack of understanding of the risk of default and the severity of the consequences associated with its loans, and taking unreasonable advantage of consumers inability to protect their interests in selecting or using Credit Acceptances loans. The joint complaint also alleges that Credit Acceptance substantially assists dealers in the deceptive sale of add-on products. The complaint seeks permanent injunctive relief, damages, and civil money penalties.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation