InfoBytes Blog
Mississippi AG reaches $3.7 million settlement with auto finance company
On July 21, the Mississippi attorney general announced a settlement with an auto finance company to resolve alleged violations of the Mississippi Consumer Protection Act. The AG claimed the auto finance company, among other things, allegedly placed consumers into loans with a high probability of default and engaged in aggressive collection practices. Under the terms of the settlement, the auto finance company will pay $3.7 million to the state, including $1.8 million in consumer restitution, and will stop collecting on loans allegedly extinguished under Mississippi law. Additionally, the auto finance company (i) will account for a borrower’s ability to pay and set a reasonable debt-to-income threshold; (ii) may not require dealers to sell any ancillary products; (iii) will “monitor dealers for possible inflation, power booking, or expense deflation”; (iv) may “not misrepresent a consumer’s prospect of redeeming a vehicle that has been repossessed”; (v) may not require borrowers to make payments through methods requiring additional third-party fees; and (vi) will notify all relevant credit reporting agencies that the borrowers’ debts have been extinguished.