Utah among 40 states to settle with auto loan company accused of predatory lending 

Dozens of Utahns are set to have their debt cancelled and get a check in the mail after a national auto loan company agreed to settle claims that it exploited borrowers with low credit scores. 

Utah and 39 other states reached the roughly $700 million settlement earlier this month with the Michigan-based Credit Acceptance Corporation. The states accused the company of quietly piling on extra costs that buyers didn’t know were optional and issuing loans they couldn’t afford. 

“No company should be able to profit by setting its own customers up to fail,” Utah Attorney General Derek Brown said in a prepared statement issued last week. “This settlement holds Credit Acceptance accountable and makes clear that lenders who cut corners will answer for it.” 

A total of 124 Utahns will receive a share of about $178,000 in restitution, Brown said. That’s in addition to more than $1 million in full debt relief for those whose cars were repossessed and nearly $527,000 for drivers who kept their vehicles.

The agreement also requires the company to give buyers an out when loans go bad quickly and take steps to prevent dealers from sneaking extras into a deal, among other safeguards, the attorney general’s office said. 

The states alleged the company gave each of its loans a score indicating how much money it expected to collect, saying many of the low-scoring borrowers defaulted and had their vehicles repossessed. 

“Exploiting vulnerable Utah consumers through high-pressure sales and deception will not be tolerated,” said Katherine Hass, director of the Utah Division of Consumer Protection.

The company, for its part, said in a news release on its website it did not admit fault or wrongdoing in the settlement. 

“This resolution provides certainty for our business, our dealer partners and the customers we serve,” said Vinayak Hegde, the company’s chief executive officer of credit acceptance. “We believe the provisions we agreed to are constructive, customer-focused and consistent with the direction of regulatory expectations in our industry.”