MLG Pursues Arbitration to Claim Compensation for Victims of Alleged Predatory Lending Tactics Employed By CAC

MLG investigates a potential breach of consumer rights after many claim they have been victimized by the alleged predatory lending practices used by Credit Acceptance Corporation (CAC). Victims of these alleged practices may have legal standing to reclaim significant compensation through arbitrations. Credit Acceptance Corporation (CAC) is a publicly traded auto finance company specializing in subprime automobile loans. The CAC’s alleged predatory business model offers automobile loans under the assumption that nearly 40% of all customers will default on their loans while also advising car dealers to inflate their car prices. CAC allegedly provides inflated selling prices for vehicles that are, on average, 77% higher than a vehicle’s KBB wholesale value. CAC’s inflated prices are exorbitantly higher than the average 12% markup at other dealerships, according to the data gathered by the CFPB from the National Automotive Dealership Association.

McCune Law Group (MLG) attorneys are dedicated to safeguarding consumers from various financial issues through their expertise in law. Serving the Inland Empire and the entire U.S., we have represented consumers in financial services class action litigation involving overbilling, mortgage fraud, and more. One of our most notable cases involved a $203 million verdict in a class action against Wells Fargo for unfair overdraft fees imposed on its California customers. We have recovered over a billion dollars in verdicts and settlements, across our practice areas.

If you or a loved one has fallen victim to the predatory lending practices by CAC, contact a Financial Services lawyer from MLG today to determine if you are eligible to join an arbitration and claim significant compensation. Contact us today by calling (909) 345-8110 or by completing the form!

Frequently Asked Questions

What is CAC’s approach to lending and how does it impact consumers?

CAC adopts a controversial business model that some consider predatory. They offer automobile loans with the assumption that nearly 40% of consumers will default on them. This approach allows them to profit from aggressive debt collection tactics and threats of litigation against those who default on their loans. Moreover, CAC advises car dealerships to artificially inflate car prices, thereby increasing the principal loan balance and bypassing state interest caps. This practice significantly impacts consumers, especially those with subprime credit, as it can lead to higher debt burdens and financial strain.

CAC incentivizes dealerships to include add-on products, such as vehicle service contracts, which further inflate the loan amount. Dealerships, in turn, often hide these add-on products in paperwork or fail to disclose their existence to consumers. The Consumer Financial Protection Bureau (CFPB) notes that at least 90% of CAC loans contain these CAC-approved add-on products. This strategy contributes to higher loan amounts and can catch consumers off guard, impacting their financial well-being.

In addition to profits from defaulted loans and inflated principal amounts, CAC generates revenue through vehicle repossessions and the subsequent auction sales of these repossessed vehicles. Repossessions, coupled with aggressive debt collection tactics, allow CAC to recoup losses and maintain a revenue stream. This aspect of their business model adds another layer to their controversial practices, as it involves reclaiming and reselling vehicles from consumers who have struggled to meet their loan obligations.

CAC’s relationship with dealerships seems highly advantageous, as dealers reportedly use CAC’s own software to manipulate specific data points. This manipulation aims to increase the amount CAC pays the dealers or the CAC Payment. The CAC Payment, which typically exceeds the amount financed, is influenced by factors such as the inclusion of add-on products and the type of car sold. This advantageous arrangement enables CAC to turn a profit on all sales, even if consumers default on the loan or if the vehicle is eventually repossessed.

How to Start a Predatory Lending Claim

If you believe that you have fallen victim to predatory lending practices, you may have a case and could be entitled to compensation. To find out if you have a viable case, follow these steps:

  1. Fill out our contact form with your information
  2. Set up your free consultation
  3. Meet with our Financial Services attorneys
  4. Discuss your potential case
  5. Discuss your next steps

We Pursue Justice for All Nationwide

When large corporations are only interested in protecting their bottom line, at the expense of their consumers and in violation of state and federal law, we are here to seek justice. Our Financial Services attorneys are familiar with all the tactics used by companies to take advantage of consumers and effectively level the playing field by competently representing the interests of consumers who have been wronged. We have gone up against Fortune 500 companies – and won. We have built a well-earned reputation as a significant member of the legal community and have obtained very large verdicts, including a $203 million verdict against Wells Fargo, and settlements and recovered over $1 billion for our clients. Our attorneys are known for getting results. Contact us today to get started.

Find out if you qualify to join an arbitration by calling (909) 345-8110 or by completing our form today!

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Counsel Richard McCune is licensed to practice only in the state of California. The law firm of McCune Law Group has attorneys licensed to practice law in AZ, CA, IL, MO, NJ, NY, and PA. McCune Law Group is a national firm that brings lawsuits in a majority of the states. In states where one of its attorneys is not barred, it does so by filing the complaint along with local counsel barred in that state.

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