USASF Fined $42.6 Million In Wrongful Repossession And Other Violations
A federal court has ordered a defunct auto finance company based out of Georgia to pay $42.6 million in damages, restitution, and penalties for violating the Consumer Financial Protection Act (CFPA), including wrongful repossessions, overbilling, and other abusive practices.
USASF provided in-house financing through US Auto Sales which was a “buy here, pay here” car dealership.
CFPB claims USASF wrongfully disabled borrowers’ vehicles, improperly repossessed vehicles, double-billed borrowers for insurance premiums, and failed to return millions of dollars in refunds to consumers.
In an opinion issued on Nov. 26, 2024, U.S. District Judge Victoria M. Calvert ruled in favor of the CFPB after the defendant, USASF, failed to respond to the lawsuit and filed for bankruptcy.
The court found the company liable for multiple violations of federal law, including wrongful activation of starter interrupt devices (SIDs), improper repossessions, and failure to refund unearned guaranteed asset protection fees.
The judgment includes $25.5 million in compensatory damages, $5.8 million in restitution, $1.27 million in prejudgment interest, and a $10 million civil penalty.
The court also issued a permanent injunction barring USASF from committing future CFPA violations.
According to court documents, USASF’s actions caused significant harm to consumers.
The company disabled vehicles using SIDs without justification, repossessed vehicles wrongfully, and overcharged customers for insurance and other fees.
Senior CFPB analyst Christopher Kulka provided expert testimony that helped calculate the damages, describing the financial and emotional toll of these practices on affected consumers.
The bureau had initially sought more specific injunctions against USASF but adhered to general language in the judgment, per legal requirements.
USASF ceased operations after filing for Chapter 7 bankruptcy in August 2023, but the court concluded the penalties are necessary to deter future violations by others in the industry.
The bankruptcy proceedings will determine how the judgment will be enforced, as some claims may be subject to prioritization under federal bankruptcy law.
