Credit Acceptance Corporation Class Action Lawsuit
- Company Name
- Credit Acceptance Corporation
- Stock Symbol
- Class Period
- November 1, 2019 to August 28, 2020
- Motion Deadline
- December 1, 2020
- Eastern District of Michigan
The Credit Acceptance Corporation class action lawsuit charges Credit Acceptance and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Credit Acceptance common stock between November 1, 2019 and August 28, 2020, inclusive (the “Class Period”). The Credit Acceptance class action lawsuit was commenced on October 2, 2020 in the Eastern District of Michigan and is captioned Palm Tran, Inc. Amalgamated Transit Union Local 1577 v. Credit Acceptance Corporation, No. 20-cv-12698.
Credit Acceptance provides financing programs and related products and services to independent and franchised automobile dealers in the United States. Approximately 95% of Credit Acceptance’s loans are considered subprime.
The Credit Acceptance class action lawsuit alleges that during the Class Period defendants made false and/or misleading statements and/or failed to disclose that: (i) Credit Acceptance was topping off the pools of loans that it packaged and securitized with higher risk loans; (ii) Credit Acceptance was making high-interest subprime auto loans to borrowers who Credit Acceptance knew would be unable to repay; (iii) the borrowers were subject to hidden finance charges, resulting in loans exceeding the usury rate ceiling mandated by state law; (iv) Credit Acceptance took excessive and illegal measures to collect debt from defaulted borrowers; (v) as a result, Credit Acceptance was likely to face regulatory scrutiny and possible penalties from various regulators or lawsuits; and (vi) as a result of the foregoing, defendants’ positive statements about Credit Acceptance’s business, operations, and adherence to appropriate laws and regulations were materially misleading and/or lacked a reasonable basis.
On August 28, 2020, the Massachusetts Attorney General filed a lawsuit against Credit Acceptance alleging that Credit Acceptance had, for years, made unfair and deceptive automobile loans to thousands of Massachusetts consumers. In addition, the lawsuit specifically alleges that Credit Acceptance provided its investors with false and/or misleading information regarding the asset-backed securitizations it offered to investors, and that Credit Acceptance engaged in unfair debt collection practices as well. And while Credit Acceptance profited from these high-risk low-score loans, default was catastrophic for borrowers, who lost their cars and down payments, had their credit scores damaged, and were left with an average debt after default of about $9,000 – which Credit Acceptance continued to collect through unlawful and aggressive collection processes. On this news, Credit Acceptance’s stock price fell more than 18% over two trading days, damaging investors.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Credit Acceptance common stock during the Class Period to seek appointment as lead plaintiff in the Credit Acceptance class action lawsuit. A lead plaintiff will act on behalf of all other class members in directing the Credit Acceptance class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Credit Acceptance class action lawsuit. An investor’s ability to share in any potential future recovery of the Credit Acceptance class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the Credit Acceptance class action lawsuit or have questions concerning your rights regarding the Credit Acceptance class action lawsuit, please provide your information here or contact counsel, Michael Albert of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at email@example.com. Lead plaintiff motions for the Credit Acceptance class action lawsuit must be filed with the court no later than December 1, 2020.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.