BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Credit Acceptance Corporation ("Credit Acceptance" or the "Company") (NASDAQ: CACC) common stock between November 1, 2019 and August 28, 2020, inclusive (the “Class Period”). Credit Acceptance investors have until December 1, 2020 to file a lead plaintiff motion.
On Friday, August 28, 2020, the Massachusetts Attorney General (“AG”) filed a complaint against Credit Acceptance alleging that the Company made unfair and deceptive auto loans to consumers and engaged in unfair debt collection practices. Among other things, the complaint alleged that, since 2013, Credit Acceptance topped off the pools of loans that it packaged and securitized with higher risk loans. It further alleged that Credit Acceptance made high interest subprime auto loans that the Company knew borrowers would be unable to pay, thereby ignoring the likelihood that the borrowers would default on their loans.
On Monday, August 31, 2020, the Massachusetts AG issued a press release announcing the lawsuit and stating that the Company’s “unaffordable and illegal loans” caused borrowers “to fall into thousands of dollars of debt and even lose their vehicles.”
On this news, Credit Acceptance’s share price fell $85.36, or 18%, to close at $374.07 per share on September 1, 2020, thereby injuring investors.
The complaint filed alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Credit Acceptance was topping off the pools of loans that they packaged and securitized with higher-risk loans; (2) that Credit Acceptance was making high interest subprime auto loans to borrowers that the Company knew borrowers would be unable to repay; (3) that the borrowers were subject to hidden finance charges, resulting in loans exceeding the usury rate ceiling mandated by state law; (4) that Credit Acceptance took excessive and illegal measures to collect debt from defaulted borrowers; (5) that, as a result, Credit Acceptance was likely to face regulatory scrutiny and possible penalties from various regulators or lawsuits; and (6) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased Credit Acceptance common stock, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to howardsmith@howardsmithlaw.com, or visit our website at www.howardsmithlaw.com.
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