JEFFERSON CITY, Mo. (Legal Newsline) - Missouri Attorney General Chris Koster announced a $125,000 assurance of voluntary compliance on Wednesday with the Michigan-based Credit Acceptance Corporation to resolve allegations that the company collected payments and obtained judgments on void automobile loans.
Credit Acceptance, an automotive finance company, allegedly tried to collect payments and obtain judgments on void sales where a consumer was never given a certificate of title by the auto dealership from which the consumer bought the vehicle. State law requires that consumers be given a certificate of ownership when taking delivery of a purchased vehicle.
Without a certificate of ownership, a sale is void and fraudulent. Consumers cannot register a vehicle with the Missouri Department of Revenue without a certificate of title, which makes the vehicle illegal to operate. "It is fundamentally unfair to force consumers to make monthly payments on a car that they may not legally own and cannot lawfully drive." Koster said. "My office's position is clear: until a consumer receives a proper certificate of title, it is unlawful for a finance company to collect on the automotive loan." Under the terms of the agreement, Credit Acceptance will make a voluntary one-time $125,000 payment to the state for the cost of the inquiry, consumer education, enforcement and advocacy. It will also implement internal procedures to prevent the issue from reoccurring and pay full monetary restitution to affected consumers who register with Koster's office within six months of the settlement date. If the issues addressed in the settlement reoccur, Credit Assistance will pay full restitution to affected consumers.
"I appreciate Credit Acceptance's willingness to address this issue and to pay affected Missourians back as part of this agreement."
As part of the agreement, Credit Acceptance does not admit any violation or wrongdoing.