Mass. Subprime Auto Lender To Pay $765,000 In Settlement For 'Routinely' Selling Defective Cars

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Massachusetts Subprime Auto Lender To Pay $765,000 In Settlement For 'Routinely' Selling Defective Cars

Ryan Felton
54 minutes ago

A Massachusetts subprime auto lender is paying $765,000 to settle claims from the state’s attorney general that it “routinely sold defective and inoperable cars,” according to the attorney general’s office.

Maura Healey, the Massachusetts attorney general, and her staff have been aggressively pursuing an investigation into subprime auto lending practice in the state. Last year, her office secured a $26 million settlement from Santander Consumer USA for alleged shoddy practices.

Late last month, Healey’s office announced a $765,000 settlement with subprime lender Source One Financial. Healey alleges Source One “facilitated the sale of defective and inoperable cars” sold by two dealers in the state, and that “Source One knew engaged in a practice of selling bad cars,” according to a press release from her office.

Source One continued to do business with these dealers despite the fact that it repossessed more than 30 percent of the cars these dealers sold. Source One failed to monitor and oversee the dealers, despite its policy not to do business with dealers that sell bad cars.

Under the terms of the settlement, Healey’s office said, Source One will pay $200,000 in consumer restitution, and it agreed to waive more than $565,000 on loans “that ended in repossession and will assist consumers with credit repair.”

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