SAN DIEGO & SOUTHFIELD, Mich.--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP announces that a purchaser of Credit Acceptance Corp. (NASDAQ: CACC) has filed a class action complaint against the company's officers for alleged violations of the Securities Exchange Act of 1934 between November 1, 2019 and August 28, 2020. Credit Acceptance Corp. is a subprime auto finance company that provides loans and other financial products to enable automobile dealers to sell vehicles to consumers.
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Credit Acceptance Corp. (CACC) Accused of Willfully Deceiving Consumers and Investors
According to the complaint, Credit Acceptance Corp. purports to improve the lives of its borrowers by improving their credit scores and allowing them to move on to more traditional sources of financing. However, during the relevant period, the Company failed to disclose to investors that: (i) it was making high-interest subprime auto loans to borrowers who would be unable to repay the loans; (ii) borrowers were subject to hidden finance charges, resulting in loans exceeding the usury rate ceiling mandated by state law; and (iii) it took excessive and illegal measures to collect debt from defaulted borrowers. On August 28, 2020, the Massachusetts Attorney General confirmed this behavior when it filed a complaint against Credit Acceptance Corp. for allegedly making unfair and deceptive auto loans to thousands of Massachusetts consumers, providing investors with false or misleading information regarding auto securities they offered, and engaging in unfair debt collection practices. The complaint detailed how the Company profited at the expense of its borrowers, who were left with thousands of dollars in debt, ruined credit, and no vehicle. The Massachusetts complaint alleges that Credit Acceptance Corp. defrauded as many as 24,000 borrowers over a six-year period, and seeks $120 million in damages, or $5,000 per violation. In response to the filing of the Massachusetts complaint, Credit Acceptance Corp's stock price took a massive hit, declining $85.36, or 18%, over two days.
If you purchased Credit Acceptance Corp. (CACC) securities between November 1, 2019 and Agust 28, 2020, you have until December 1, 2020, to ask the court to appoint you lead plaintiff for the class.
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