Consumer complaint received 2024-12-09 00:00:00
Product: Vehicle loan or lease — Loan
Issue: Struggling to pay your loan — Denied request to lower payments
Company: American Credit Acceptance, LLC
State: PA

Complaint narrative:
Loan Overview : - Date Financed : XX/XX/XXXX - Loan Amount Financed : {$36000.00} - APR : 24 % - Loan Term : 73 months - Monthly Payment : {$970.00} - Payoff Amount Quoted ( XXXX XXXX ) : {$36000.00} - Total Paid to Date ( 21 months ) : {$18000.00} - Current Principal Balance : {$34000.00} - Fees & Charges : {$1400.00} - Vehicle : XXXX XXXX XXXX, XXXX miles - Estimated Vehicle Value ( XXXX ) : {$24000.00} {$28000.00} I am filing this complaint against American Credit Acceptance ( ACA ) as a co-signer on the above-mentioned auto loan. While I have not been contacted directly by ACA, I am legally responsible for this debt, and I have experienced direct financial harm due to ACAs predatory lending practices, unjustified fees, and refusal to provide transparency about the payments made on this account. I have witnessed how ACAs actions have caused my credit to be negatively impacted and how their excessive loan balance has prevented me from helping the primary borrower refinance the loan through reputable lenders. 

This loan has become a financial and emotional burden. I co-signed this loan to support the primary borrower, but I now see that ACA 's structure was never intended to help borrowers succeed. Despite making over {$18000.00} in payments over 21 months, only {$2400.00} has been applied to reduce the principal. Meanwhile, ACA claims that the payoff balance is {$36000.00}, which is almost identical to the original loan balance of {$36000.00}. This discrepancy makes no logical sense after nearly 2 years of payments. 

Worse, attempts to refinance the loan through major lenders like XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX and XXXX have all been denied. Each lender cited that the payoff amount is far higher than the actual value of the car, making it impossible to refinance. This leaves me financially trapped as a co-signer because I am legally responsible for a debt that can not be paid off, can not be refinanced, and continues to grow through fees and interest. This is the definition of predatory lending. 

1. Minimal Principal Reduction Despite Substantial Payments I am responsible for this loan, but I have no control over how ACA allocates payments. Despite {$18000.00} in payments made, the principal has only been reduced by {$2400.00}, while over {$16000.00} has gone to interest, fees, and penalties. This is a clear misapplication of payments and does not align with basic principles of simple interest loans.

According to ACA, this is a simple interest loan, which means payments should be applied to interest and principal according to the terms of the contract. However, the vast majority of payments are being directed toward fees and interest, and ACA refuses to provide an itemized breakdown. I have been left in the dark about how payments are being applied, and despite repeated requests from the primary borrower, ACA has never provided a clear payment history. 

As a co-signer, I have the right to see how payments are being handled and how fees are being applied. If I am legally responsible for this loan, I have the right to know how payments are being allocated. 

2. Excessive and Unjustified Fees The most recent payoff statement from ACA shows a total of {$1400.00} in fees and charges, but I have never received an explanation for these fees. The primary borrower requested an itemized breakdown, but ACA did not provide one. These fees seem to grow over time, and there is no clear logic as to how they were calculated. 

If I am being held responsible for fees as a co-signer, I deserve to know how they were calculated, whether they are legitimate, and how they are being applied. I believe these fees are excessive and designed to inflate the balance to keep the loan in a negative-equity position. I believe this practice is illegal, deceptive, and violates fair lending principles. 

3. Grossly Inflated Payoff Balance ( 150160 % Loan-to-Value ) The payoff balance is {$36000.00}, which is almost identical to the original loan amount of {$36000.00}, even though over {$18000.00} has already been paid. At the same time, the vehicle 's current value ( based on XXXX XXXX XXXX ) is only {$24000.00} to {$28000.00}. This leaves a Loan-to-Value ( LTV ) ratio of 150160 %, far beyond industry standards for reasonable loans. 

Because of this inflated LTV, I have been unable to help the primary borrower refinance this loan through other lenders. We submitted refinancing applications to XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX, but each lender denied the application. The reason for denial was the same each time : the loan balance is too far above the value of the car. This is a clear sign that ACA 's lending practices are not consistent with fair lending principles. 

4. Predatory Lending and Debt Trap As a co-signer, I was led to believe that I was signing up for a fair and manageable loan. But after nearly 2 years, I have seen how ACAs predatory lending structure is designed to trap borrowers in debt they can not escape. 

Heres why I believe ACAs practices are predatory : - Payments are disproportionately allocated to fees and interest, with only 13 % applied to principal.

- The LTV ratio is inflated so high ( 150160 % ) that it prevents borrowers from refinancing. 
- The fees are excessive, unexplained, and appear to be used to maintain the balance, even as payments are made. 
- ACA refuses to provide transparency or full payment breakdowns. 

The result is that I am financially trapped in a loan that I can not refinance, can not resolve, and can not pay off. This is not just financially burdensome it is emotionally exhausting. 

If ACA fails to resolve this matter, I am prepared to escalate my complaint to the state attorney general. I have been financially harmed as a co-signer and left with no way to refinance or settle the loan. I believe ACA has engaged in predatory lending practices, which violate fair lending principles. 

I agreed to co-sign this loan in good faith, but I have now seen how ACA traps borrowers in debt they can not escape. I have experienced credit score damage because the balance never seems to go down, and Ive had to endure the stress of being legally responsible for a debt I can not control. I ask that the CFPB hold ACA accountable for its unfair practices and demand transparency, fairness, and equity.

Company response to consumer: Closed with explanation