Iowa AG settles interest rates case
DES MOINES, Iowa (Legal Newsline) - Iowa Attorney General Tom Miller announced on Friday that his Consumer Protection Division settled with a Muscatine used vehicle dealership over interest rates it charged its customers.
A-1 Quality Tire & Car Service, also doing business as A1 Used Cars, allegedly charged excessive interest rates in credit agreements with consumers who purchased vehicles and financed them through the dealership. The assurance of discontinuance requires A1 Quality Tire & Car Service to refund the difference between a finance charge it levied on consumers and the maximum finance charge that was legally allowed.
The Iowa auto loan interest rate cap is 27 percent. Many of the car repayment plans involved vehicles older than two model years old with alleged rates of more than 30 percent.
"We found interest rates well into the 30 percent range and above," Miller said. "We pursued this case to make sure that car buyers were not charged above the state maximum for interest."
The refunds to consumers will come either as checks made out to the consumers or an as offset on money consumers owe to the dealership. Additionally, the agreement requires that the dealership comply with Iowa interest rate caps on auto loans in all future agreements of credit with consumers.