Utah to get $2M in auto loan settlement, attorney general announces

SALT LAKE CITY — Utah Attorney General Derek Brown announced Sunday that the state would be receiving almost $2 million for affected consumers as part of a nationwide settlement with an auto-financing company that took advantage of buyers with low credit.

Utah joined with 39 other attorneys general in a $694 million settlement with Credit Acceptance Corporation, one of the largest auto-loan companies in the country. The settlement provides cash restitution and canceled debt for consumers nationwide on car loans.

About $1.9 million will go toward relief for Utah consumers, with $122,092 paid directly to the state, the attorney general's office announced.

Credit Acceptance Corporation extends credit to borrowers with low or limited credit histories, but following an investigation, the corporation was accused of issuing loans it knew consumers could not afford.

"Credit Acceptance Corporation assigned each loan a score reflecting how much it expected to collect, and many low-scoring borrowers defaulted and had their vehicles repossessed," the attorney general's office said.

The 124 affected Utah consumers will receive a share of $177,935 in cash restitution. Approximately $1,083,782 of debt relief will be paid for those whose vehicles were repossessed and $526,810 will be for consumers who retained their vehicles.

"No company should be able to profit by setting its own customers up to fail. This settlement holds Credit Acceptance accountable and makes clear that lenders who cut corners will answer for it," Brown said.

The attorneys general say the company pushed dealers to sell extra products and coverage, causing buyers to often pay way more than they needed to get a loan.

"According to the states, the way Credit Acceptance Corporation paid its dealers, combined with weak oversight, encouraged the practice," the attorney general's statement said.

The settlement will take effect on Nov. 2 and requires Credit Acceptance Corporation to change how they make loans to stop dealers from adding extra costs without the buyer's agreement. The agreement also requires the company to give people a way out of risky loans, put safeguards in place so extra products can't be secretly slipped into deals, limit car prices, stop dealers from raising prices because of the buyer's credit, and to be more transparent with buyers on the risk of falling behind on payments.

"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. "We remain committed to holding bad actors accountable and delivering justice directly to affected Utah households."

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