7 votes

How a subprime auto lender consumed Detroit with debt and turned its courthouse into a collections agency

2 comments

  1. Pilgrim
    Link
    I was unsure of where to post this so please do feel free to move it if this isn't the appropriate place. Some highlights:

    I was unsure of where to post this so please do feel free to move it if this isn't the appropriate place.

    Some highlights:

    “I began to realize that, even as I worked as hard as I possibly could at selling cars, we would have to do better on the collections side,” Foss said in 2009, reflecting on how he’d managed to grow and sustain a business that had provided financing to low-credit car buyers for nearly 40 years. It certainly ended well for Foss, who stepped down last year, netting $128 million upon retirement by selling off his company shares.

    The company has acknowledged it repossesses about 35 percent of all vehicles it finances, and its aggressive methods to pursue buyers for non-payment is widely known. Debt collectors retained by the company chase after defaulted buyers for as long as 20-25 years, garnishing their wages and recouping sums that sometimes exceed two times the original loan amount.

    In 2017, one out of every eight civil lawsuits filed in Detroit’s 36th District Court, the largest district court in the state of Michigan, was a collection case brought by Credit Acceptance, according to an analysis of publicly available court records by Jalopnik. Credit Acceptance alone—a company meant to service subprime car loans under the cheerful motto of “We change lives!”—absolutely dominates the civil case volume of one of the country’s busiest courts.

    5 votes
  2. Chopincakes
    Link
    I don't really have anything insightful to say, but am just overall disgusted with people/businesses/lenders that are able to get away with practices that take advantage of individuals who are...

    I don't really have anything insightful to say, but am just overall disgusted with people/businesses/lenders that are able to get away with practices that take advantage of individuals who are already low-income. It's taking advantage of people who need the most help and it's sickening. I think 25% interest rates go beyond the arguments of 'it was their fault for signing! lol personal responsibility' and are just predatory in nature.

    4 votes