AG’s office says car dealer/lender made predatory loans to thousands
BOSTON – The used car dealership JD Byrider will cancel debts, pay $1.5 million to reduce car loan payments and provide restitution to thousands of consumers, and significantly change its practices to resolve allegations that it engaged in deceptive sales of defective vehicles and predatory lending, Attorney General Maura Healey announced in a news release.
In a consent judgment entered last week in Suffolk Superior Court, JD Byrider agreed to provide significant monetary and injunctive relief to resolve a lawsuit filed by the AG’s Office in September 2017 that alleged the dealership took advantage of consumers and violated the Massachusetts consumer protection law. According to the AG’s complaint, JD Byrider routinely used aggressive and misleading advertising and sales techniques to sell consumers cars it should have known the consumers could not afford, putting the consumers at high risk of default and repossession, the news release said.
“Auto dealers can’t profit by saddling vulnerable consumers with predatory car loans that are doomed to fail,” said AG Healey in the press release. “This judgment secures significant relief for the thousands of Massachusetts car buyers cheated by JD Byrider’s misconduct.”
JD Byrider is a franchise of Byrider Franchising LLC, a national franchisor of JD Byrider “Buy Here Pay Here” dealerships located across the country that typically provide loans to finance the cars they sell. The AG’s lawsuit was filed against the local Massachusetts franchise Venturcap Investment Group, which operates in Brockton, Dartmouth, Springfield, and formerly in Dorchester, according to the news release.
The AG’s complaint alleged that JD Byrider sold its cars at more than twice their actual value, forced consumers into loans with high interest rates without regard for the consumers’ credit qualifications, and sold consumers expensive extended service contracts that stipulated they could only get their cars repaired by JD Byrider. The complaint alleged JD Byrider employed a faulty underwriting process through which it vastly underestimated consumers’ expenses to qualify them for loans they could not afford. Due to these practices, JD Byrider’s used car loans failed at excessive rates, causing substantial long-term economic harm to thousands of consumers.
This consent judgment follows a court decision awarding summary judgment in favor of the AG’s Office in January 2020. The court determined that JD Byrider issued loans to vulnerable consumers that the dealership knew or should have known the consumers could not afford. JD Byrider agreed to resolve the entirety of the AG’s lawsuit with today’s consent judgment, providing restitution and relief to consumers who purchased cars at JD Byrider’s Springfield, Brockton, Dorchester (now closed), and Dartmouth locations between 2013 and 2017, the news release noted.
In the consent judgment the company agrees to:
Pay $1.5 million, of which half will be used to reduce ongoing payments for consumers with active loans who purchased their cars prior to 2018.
Provide eligible consumers whose cars were repossessed the option to cancel outstanding debts and repair their credit from the repossession.
Change its business practices to provide fair disclosures and enhanced repair services, including by posting prices on its cars and providing rental cars in certain repair circumstances.
Develop a structured response process for consumer complaints received by the AG’s Office.
Consumers who are eligible for relief as part of this settlement will be contacted directly by the AG’s Office.
The AG’s Office continues to investigate deceptive practices in the auto industry.
In November 2019, Framingham’s AutoMax agreed to a $925,000 judgment to resolve allegations that it engaged in unfair and deceptive sales practices. In December 2018, the AG’s Office settled a lawsuit with F&R Auto, a Westport used auto dealership that sold unsafe and defective vehicles to unsuspecting consumers, and Sensible Auto Lending, a lender that facilitated deceptive sales at F&R Auto. The Office also shut down a dealership, Auto Number One, for selling unsafe cars and obtained restitution and injunctive relief from another dealership, Auto Drive One, for routinely selling defective and unreliable cars, according to the new release.
For tips or questions about the auto industry, consumers may call the Attorney General’s consumer hotline at 617-727-8400 or file a complaint with the office.
This matter is being handled by Assistant Attorneys General Lisa Dyen, Samantha Shusterman and Kimberly McDonald, and Deputy Chief Shennan Kavanagh, with assistance from Paralegal David Birch, all of the AG’s Consumer Protection Division, and with further assistance from Investigator Ciara Tran of the AG’s Civil Investigations Division.