American Credit Acceptance Settlement for Improper Car Repossession

American Credit Acceptance Settlement for improper car repossession

American Credit Acceptance is a lending company that specializes in securing automotive loans by connecting consumers with dealers. The company has helped more than 630000 consumers in finding affordable vehicle options by partnering with more than 2500 dealers. However, a class-action lawsuit has been filed against American Credit Acceptance alleging the company of failing to meet the California lending laws. The defendants haven’t admitted to wrongdoing but have agreed to honor the settlement by forgiving more than $98 million in deficient account balances for resolving the claims of improper car repossession.

As per the plaintiffs, ACA violated California’s Rees-Levering Automotive Sales Finance Act with insufficient written notices. The company has also come under the scanner for supposedly assessing deficiency balances on customer accounts based on these notices which resulted in credit reports. The court has ordered plaintiffs to arbitrate their claims outside of court and this process started in 2020.

Under the terms of the settlement, approximately 8500 accounts having deficiency balances shall be wiped clean and ACA will no longer try collecting on these accounts after the sale of the surrendered or repossessed vehicles. The company will also request the credit reporting agencies to delete any reference to these accounts to improve the credit scores such as trade lines referencing settlement class members’ accounts. ACA will not make any future reports concerning the deficiency balances allegedly owed by the settlement class members. The last date for class members to object to or exclude themselves from the settlement is 9th May 2022.

There are approximately 8500 accounts belonging to the class members having deficiency balances totaling roughly $98,033,433.44. Class members do not need to submit any claim form for benefitting from the settlement. They will be automatically eligible to receive benefits if they do not exclude themselves specifically from the settlement. The Class Counsel will seek fees and costs of the attorney of $225000 subject to the Court’s approval at the final hearing. If these fees and costs are approved by the court, ACA shall pay them separately without reducing the benefits of the class members under the settlement. Additionally, the Class Representatives will request an award of $10000 each for the services rendered to the settlement class. These service awards will be paid separately by ACA on approval of the court without diminishing the benefits of the class members.

Eligibility For Making Claim: The terms of the settlement are expected to benefit individuals:

  • Who entered into a retail installment sale contract for the sale of a motor vehicle,
  • Received a written notice from the American Credit Acceptance about the pending sale or disposal of their surrendered or repossessed vehicles between 2nd December 2015 and 11th February 2021.
  • Whose vehicles were sold after surrender or repossession and
  • From whom a deficiency balance was charged on their accounts.

However, the settlement doesn’t benefit individuals who meet the description but who reached a court judgment previously over deficiency balances prior to 2nd December 2019, who were deceased, or who filed for bankruptcy without dismissal of the bankruptcy case.

Settlement Website:
Proof Of Purchase: No proof of purchase is applicable.
Potential Claim Amount: Forgiven deficiency balances.
Claim Form: No claim form is required.
Deadline For Submitting Claim: N/A
Final Hearing Date: 07/28/2022
Settlement Amount: Over $98 million