On August 12, 2020, the Vermont Attorney General (Vermont AG) announced a settlement with an auto financing company related to alleged unfair or deceptive practices concerning the company’s subprime auto loans.
According to the Vermont AG’s complaint, filed on August 7, 2020, the company engaged in unfair and deceptive practices in violation of the Vermont Consumer Protection Act, 9 V.S.A. § 2453. Specifically, the Vermont AG alleged that the auto financing company knowingly placed consumers into auto loans that had a high chance of default and exposed consumers to unnecessarily high levels of risk.
Under the settlement, the auto financing company has agreed to pay $75,000 in restitution to consumers, return the titles of cars to consumers with the lowest quality loans that have not had their cars repossessed, waive the balance on consumer loans, waive deficiency balances, and participate in credit repair for affected consumers. The settlement also requires the company to review consumers’ income and refuse financing to consumers that have no income remaining after taking their monthly debt obligations into consideration. The Vermont AG will also receive a $30,000 payment to cover costs and fees.
This settlement comes on the heels of the multistate settlement with the same auto financing company, which we reported on in May.