Georgia – A federal court has mandated a defunct Georgia-based auto finance company, US Auto Sales Financing Services (USASF), to pay over $42 million in damages, restitution, and penalties for using fraudulent strategies violating the Consumer Financial Protection Act (CFPA), in what appears to be a historic ruling that marks a major victory for consumer rights. This ruling results from a string of legal actions and investigations resulting from the company’s misbehavior including overbilling and incorrect vehicle repossession.
Operating 39 dealerships spread throughout six states—Georgia, Florida, Tennessee, South Carolina, North Carolina, and Alabama—the corporation abruptly stopped operations in April 2023, leaving many customers and staff in chaos. Originally opened in Lawrenceville, Georgia, USASF positioned itself as a handy “buy here, pay here” dealership by offering in-house financing to its clients.
Filing the complaint in August 2023, the Consumer Financial Protection Bureau (CFPB) charged USASF of many criminal activity. These included improper repossession of cars, double invoicing for insurance premiums, the wrongful deployment of starter interrupt devices (SIDs) to disable borrowers’ vehicles, and neglect to return millions in refunds to its users.
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Following USASF’s bankruptcy declaration and non-response to the action, U.S. District Judge Victoria M. Calvert rendered a decision in favor of the CFPB on November 26, 2024. Judge Calvert found the company liable for multiple federal law violations; Judge Calvert ordered USASF to pay $25.5 million in compensatory damages, $5.8 million in restitution, $1.27 million in prejudgment interest, and a $10 million civil penalty. Additionally, a permanent injunction was issued to prevent future CFPA violations by the company.
According to the court records, USASF’s policies emotionally disturbed its clients in addition to financial losses. The company’s dishonest use of SIDs sometimes left consumers without a vehicle unlawfully; meanwhile, many people’s financial problems were exacerbated by incorrect repossessions and exaggerated insurance premiums.
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Senior CFPB analyst Christopher Kulka’s expert testimony during the hearings emphasized the significant emotional and financial impact on affected consumers, therefore enabling the court to estimate the damages rendered.
Even if USASF filed for bankruptcy in August 2023, the court’s decision emphasizes a strong opposition against unethical corporate activities in the car finance sector. The fines issued are considered as a major deterrent, meant to discourage other companies from violating like policies. The verdict will be enforced under the continuous bankruptcy processes, where federal law will be followed in addressing and ranking certain claims made by the creditors of the corporation.
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Apart from providing closure to some impacted by USASF’s policies, this case emphasizes the need of implementing consumer protection rules.
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