Boston — A former auto dealer and associated lending and leasing companies have agreed to provide debt relief and credit repair to consumers relating to high-cost auto loans and leases that allegedly violated Massachusetts law, Attorney General Maura Healey announced today.
Under the terms of the assurance of discontinuance filed in Suffolk Superior Court, All-Star Auto Sales, Inc., Assured Auto Leasing LLC, and Assured Finance, Inc., formerly headquartered in Marlborough, (collectively, the “All-Star Companies”) have agreed to waive debt on certain defaulted loan and lease contracts, allow certain consumers to keep their vehicles without making further payments, and provide credit repair to affected consumers. Nearly 100 residents are expected to received loan discharges under the settlement, totaling approximately $500,000.
“We alleged that these illegal high-cost auto loans and leases put consumers at an unfair disadvantage,” said AG Healey. “Companies that engage in unlawful auto lending and leasing practices are not welcome in Massachusetts.”
The AG’s Office alleges that the All-Star Companies originated and acquired vehicle loans and auto leases with finance charges that exceeded the state’s 21 percent usury cap and failed to properly disclose these finance charges on certain loans. The alleged usury violations, in connection with the auto loans, occurred because the companies failed to disclose properly certain insurance premiums on the loans. The alleged violations, in connection with the auto leases, are the result of charging consumers more than the value of the vehicle over the lease term and allowing the consumer to acquire the vehicle at the end of the lease with a small payment.
The Assurance of Discontinuance also bars these companies from making loans or leases in Massachusetts in the future.
Attorney General Healey is a national leader in tackling abusive subprime auto lending practices. She recovered $12.8 million relating to allegedly usurious auto loans through settlements with Santander, Westlake and the American Credit Acceptance Corporation. She also launched investigations into the securitization of subprime auto loans, recovering over $30 million through resolutions with Exeter LLC and Santander.
Consumers with questions about today’s settlement should contact AG Healey's Insurance and Financial Services hotline at 1-888-830-6277.
Today’s resolution was handled by Assistant Attorney General Michael Sugar with assistance from Tim Hoitink, Burt Feinberg, and Arwen Thoman, all of the Attorney General’s Insurance & Financial Services Division.