InfoBytes Blog
Massachusetts AG Settles with Auto Lender Over Alleged "Excessive" Interest Rate Charges
On November 5, Massachusetts AG Maura Healey announced a settlement with a national auto lender to resolve allegations that the lender charged excessive interest rates on subprime auto loans. The company agreed to provide over $5 million – approximately $11,000 per consumer – in relief to those affected by its alleged practice of charging consumers excessive interest rates as a result of including fees from an add-on GAP insurance product. Under the terms of the assurance and discontinuance, the company will (i) eliminate the alleged excessive interest on certain loans as a result of the GAP fee; and (ii) forgive outstanding interest on loans. In addition, the company must pay $150,000 to Massachusetts and perform supervised audits of its existing loan portfolio to ensure that no additional consumers were overcharged because of GAP fees.