A federal judge in Georgia is ordering a bankrupt auto financing company to pay out $42.6 million in damages, restitution and penalties for violating the Consumer Financial Protection Act. It apparently carried out wrongful repossessions, over billing and other awful practices and scams. Sometimes car dealers cannot help but be bastards. At least, once in a while, they pay for the shit they pull.
The finance company was part of U.S. Auto Sales – a dealership network that spanned the Southeast U.S. It had 39 dealerships across six states: Georgia, Florida, Tennessee, South Carolina, North Carolina and Alabama, but its roots are traced back to Lawrenceville, Georgia, according to 11 Alive. In August of 2024, the Consumer Financial Protection Bureau filed a lawsuit in federal court against its auto-loan arm called U.S. Auto Sales Financing Service for illegal practices at these “buy here, pay here” dealerships.
Here’s more on what they did and the fallout. From 11 Alive:
CFPB claims USASF wrongfully disabled borrowers’ vehicles, improperly repossessed vehicles, double-billed borrowers for insurance premiums, and failed to return millions of dollars in refunds to consumers.
In an opinion issued on Nov. 26, 2024, U.S. District Judge Victoria M. Calvert ruled in favor of the CFPB after the defendant, USASF, failed to respond to the lawsuit and filed for bankruptcy.
The court found the company liable for multiple violations of federal law, including wrongful activation of starter interrupt devices (SIDs), improper repossessions, and failure to refund unearned guaranteed asset protection fees.
The judgment includes $25.5 million in compensatory damages, $5.8 million in restitution, $1.27 million in prejudgment interest, and a $10 million civil penalty.
USASF ceased operations in August of 2023 after filing for Chapter 7 bankruptcy, but that doesn’t matter to the court. It says the penalties are necessary to deter future violations by others in the industry, 11 Alive reports. Good for them. The bankruptcy proceedings will determine how the judgment will be enforced, and some claims may be prioritized under federal bankruptcy law.
Here’s what Judge Victoria Marie Calvert of the Northern District of Georgia said in her ruling. From WSB-TV2 Atlanta:
Judge Calvert wrote that “due to programming errors, system errors, and human error, USASF erroneously sent warning tones over 71,000 times to consumers who had made a payment or were not in default.”
The judge found that bankruptcy protections should not protect USAF Servicing from this judgment.
WSB spoke with Navadia Brooks, one of the customers caught up in this scam. After nearly a year and a half, she still doesn’t have a car. Her Nissan Altima, which was purchased at U.S. Auto Sales, was repossessed.
“I’m keeping the faith that I will get something from a settlement,” Brooks told the outlet.
