Massachusetts Attorney General Sues Auto Dealer Alleging Predatory Sales and Loan Practices

On September 26, 2017, Massachusetts Attorney General Maura Healey (AG) announced that she sued a Massachusetts used car dealership for allegedly using predatory practices to sell poor quality cars with high cost loans.  The AG’s lawsuit asserts that the dealership violated the Massachusetts Consumer Protection Act, G.L. c. 93A, § 4, by taking advantage of consumers by routinely trapping them in an unsustainable sales package via an aggressive and misleading advertising and sales campaign.

According to the complaint, the customers purchased defective vehicles at more than double their retail value—hundreds of these cars were returned by consumers to the dealership for repair within three months of purchase due to the breakdown of major vehicle components like the engine and brakes.  The AG asserts that drivers  were required to take on a car loan with an annual percentage rate of 20 percent regardless of their credit qualifications, and because the dealership bundled its extended service contract into the loan, consumers  were forced to pay 20 percent interest on that product.
The AG’s complaint also alleges that the dealership qualified drivers for loans they could not afford by underestimating the consumer’s expenses and costs.  As a result of its purportedly faulty underwriting process, more than half of the dealership deals failed or ended in repossession, causing harm to consumers in the form of both the inflated costs and damage to their credit.  The AG’s complaint seeks injunctive relief and restitution for consumers, plus  penalties, costs, and attorney fees.