A major subprime auto lender has agreed to wipe out outstanding debts for tens of thousands of borrowers while paying tens of millions in penalties and restitution as part of a settlement. The resolution follows allegations of predatory lending practices that disproportionately targeted vulnerable consumers. Borrowers affected by the company’s policies will see their remaining balances discharged, while regulators will receive financial penalties tied to the misconduct. The settlement underscores growing scrutiny over aggressive debt collection tactics in the financial services industry.
Credit Acceptance will forgive debt for over 55,000 borrowers and pay $75.5 million combined in restitution and penalties under the settlement.
